Ideally, your overall portfolio should beat the market average. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in Cnlight Co.,Ltd (SZSE:002076), since the last five years saw the share price fall 37%. We also note that the stock has performed poorly over the last year, with the share price down 22%. And the share price decline continued over the last week, dropping some 14%. However, this move may have been influenced by the broader market, which fell 6.3% in that time.

If the past week is anything to go by, investor sentiment for CnlightLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for CnlightLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

CnlightLtd became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

It could be that the revenue decline of 31% per year is viewed as evidence that CnlightLtd is shrinking. This has probably encouraged some shareholders to sell down the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling CnlightLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

CnlightLtd shareholders are down 22% over twelve months, which isn't far from the market return of -21%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 6% per year over the last five years. It will probably take a substantial improvement in the fundamental performance for the company to reverse this 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. For example, we've discovered 1 warning sign for CnlightLtd that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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.