Zheneng Jinjiang Environment Holding (SGX:BWM) shareholders have endured a 60% loss from investing in the stock three years ago

While it may not be enough for some shareholders, we think it is good to see the Zheneng Jinjiang Environment Holding Company Limited (SGX:BWM) share price up 16% in a single quarter. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 60% in the last three years. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

See our latest analysis for Zheneng Jinjiang Environment Holding

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Although the share price is down over three years, Zheneng Jinjiang Environment Holding actually managed to grow EPS by 863% per year in that time. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

Revenue is actually up 9.6% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Zheneng Jinjiang Environment Holding further; while we may be missing something on this analysis, there might also be an opportunity.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

If you are thinking of buying or selling Zheneng Jinjiang Environment Holding stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Zheneng Jinjiang Environment Holding shareholders have received a total shareholder return of 48% over one year. There's no doubt those recent returns are much better than the TSR loss of 8% per year over five years. 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 Zheneng Jinjiang Environment Holding better, we need to consider many other factors. Take risks, for example - Zheneng Jinjiang Environment Holding has 3 warning signs we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.