The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in The Fulham Shore PLC (LON:FUL) have tasted that bitter downside in the last year, as the share price dropped 41%. That's disappointing when you consider the market declined 6.5%. On the other hand, the stock is actually up 3.8% over three years. Shareholders have had an even rougher run lately, with the share price down 23% in the last 90 days.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

Check out our latest analysis for Fulham Shore

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 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 last year Fulham Shore grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. So it makes sense to check out some other factors.

Fulham Shore's revenue is actually up 105% 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.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We know that Fulham Shore has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Fulham Shore stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Fulham Shore shareholders are down 41% for the year. Unfortunately, that's worse than the broader market decline of 6.5%. 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 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Take risks, for example - Fulham Shore has 3 warning signs we think you should be aware of.