Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the Shandong Yisheng Livestock & Poultry Breeding Co., Ltd. (SZSE:002458) share price is down 30% in the last year. That contrasts poorly with the market decline of 8.7%. Longer term investors have fared much better, since the share price is up 4.4% in three years. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 9.9%. But this could be related to good market conditions, with stocks up around 5.1% during the period.

While the stock has risen 4.9% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the unfortunate twelve months during which the Shandong Yisheng Livestock & Poultry Breeding share price fell, it actually saw its earnings per share (EPS) improve by 38%. It's quite possible that growth expectations may have been unreasonable in the past.

It's fair to say that the share price does not seem to be reflecting the EPS growth. But we might find some different metrics explain the share price movements better.

With a low yield of 1.9% we doubt that the dividend influences the share price much. Shandong Yisheng Livestock & Poultry Breeding's revenue is actually up 11% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

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

We know that Shandong Yisheng Livestock & Poultry Breeding has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Shandong Yisheng Livestock & Poultry Breeding's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 8.7% in the twelve months, Shandong Yisheng Livestock & Poultry Breeding shareholders did even worse, losing 30% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Shandong Yisheng Livestock & Poultry Breeding is showing 2 warning signs in our investment analysis , you should know about...

But note: Shandong Yisheng Livestock & Poultry Breeding may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.