This week we saw the Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (HKG:1349) share price climb by 18%. But in truth the last year hasn't been good for the share price. In fact the stock is down 33% in the last year, well below the market return.

See our latest analysis for Shanghai Fudan-Zhangjiang Bio-Pharmaceutical

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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 Shanghai Fudan-Zhangjiang Bio-Pharmaceutical share price fell, it actually saw its earnings per share (EPS) improve by 103%. Of course, the situation might betray previous over-optimism about growth.

The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.

Given the yield is quite low, at 1.6%, we doubt the dividend can shed much light on the share price. Shanghai Fudan-Zhangjiang Bio-Pharmaceutical's revenue is actually up 39% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on Shanghai Fudan-Zhangjiang Bio-Pharmaceutical's balance sheet strength is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Shanghai Fudan-Zhangjiang Bio-Pharmaceutical's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Shanghai Fudan-Zhangjiang Bio-Pharmaceutical shareholders, and that cash payout explains why its total shareholder loss of 32%, over the last year, isn't as bad as the share price return.

A Different Perspective

While the broader market lost about 20% in the twelve months, Shanghai Fudan-Zhangjiang Bio-Pharmaceutical shareholders did even worse, losing 32% (even including dividends) . Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6.9% 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. Before deciding if you like the current share price, check how Shanghai Fudan-Zhangjiang Bio-Pharmaceutical scores on these 3 valuation metrics.

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 HK exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.