No-one enjoys it when they lose money on a stock. But it's hard to avoid some disappointing investments when the overall market is down. The Jiangsu Sanfame Polyester Material Co.,Ltd. (SHSE:600370) is down 19% over three years, but the total shareholder return is -8.3% once you include the dividend. That's better than the market which declined 10% over the last three years. On the other hand the share price has bounced 7.1% over the last week. The buoyant market could have helped drive the share price pop, since stocks are up 3.5% in the same period.

While the last three years has been tough for Jiangsu Sanfame Polyester MaterialLtd shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

Check out our latest analysis for Jiangsu Sanfame Polyester MaterialLtd

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Jiangsu Sanfame Polyester MaterialLtd saw its EPS decline at a compound rate of 19% per year, over the last three years. This fall in the EPS is worse than the 7% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Jiangsu Sanfame Polyester MaterialLtd, it has a TSR of -8.3% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

While the broader market lost about 2.5% in the twelve months, Jiangsu Sanfame Polyester MaterialLtd shareholders did even worse, losing 9.8% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Jiangsu Sanfame Polyester MaterialLtd (including 1 which makes us a bit uncomfortable) .

Of course Jiangsu Sanfame Polyester MaterialLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.