Guangdong Sunwill Precising Plastic Co.,Ltd (SZSE:002676) shareholders might be concerned after seeing the share price drop 14% in the last week. But that doesn't change the fact that the returns over the last three years have been pleasing. In fact, the company's share price bested the return of its market index in that time, posting a gain of 33%.

Since the long term performance has been good but there's been a recent pullback of 14%, let's check if the fundamentals match the share price.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Guangdong Sunwill Precising PlasticLtd was able to grow its EPS at 13% per year over three years, sending the share price higher. This EPS growth is higher than the 10% average annual increase in the share price. So it seems investors have become more cautious about the company, over time. Having said that, the market is still optimistic, given the P/E ratio of 82.42.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Guangdong Sunwill Precising PlasticLtd's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Guangdong Sunwill Precising PlasticLtd has rewarded shareholders with a total shareholder return of 3.2% in the last twelve months. That certainly beats the loss of about 1.9% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Guangdong Sunwill Precising PlasticLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Guangdong Sunwill Precising PlasticLtd 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.