Shandong Ruifeng Chemical Co., Ltd. (SZSE:300243) shareholders should be happy to see the share price up 28% in the last month. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 37% in the last three years, significantly under-performing the market.

On a more encouraging note the company has added CN¥381m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

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...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the three years that the share price fell, Shandong Ruifeng Chemical's earnings per share (EPS) dropped by 6.2% each year. This reduction in EPS is slower than the 14% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Shandong Ruifeng Chemical's key metrics by checking this interactive graph of Shandong Ruifeng Chemical's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Shandong Ruifeng Chemical shareholders have received a total shareholder return of 7.4% over one year. That certainly beats the loss of about 0.8% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Shandong Ruifeng Chemical (of which 2 make us uncomfortable!) you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.