By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the SINOPEC Shandong Taishan Pectroleum Co., Ltd. (SZSE:000554) share price is up 60% in the last three years, clearly besting the market decline of around 25% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 19% in the last year , including dividends .
Since it's been a strong week for SINOPEC Shandong Taishan Pectroleum shareholders, let's have a look at trend of the longer term fundamentals.
View our latest analysis for SINOPEC Shandong Taishan Pectroleum
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
SINOPEC Shandong Taishan Pectroleum was able to grow its EPS at 62% per year over three years, sending the share price higher. The average annual share price increase of 17% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock. Having said that, the market is still optimistic, given the P/E ratio of 131.97.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on SINOPEC Shandong Taishan Pectroleum's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that SINOPEC Shandong Taishan Pectroleum shareholders have received a total shareholder return of 19% over one year. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. You could get a better understanding of SINOPEC Shandong Taishan Pectroleum's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.