For many, the main point of investing is to generate higher returns than the overall market. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in XinJiang Ba Yi Iron & Steel Co.,Ltd. (SHSE:600581), since the last five years saw the share price fall 16%. And the share price decline continued over the last week, dropping some 6.4%. But this could be related to the soft market, which is down about 3.0% in the same period.

Since XinJiang Ba Yi Iron & SteelLtd has shed CN¥427m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for XinJiang Ba Yi Iron & SteelLtd

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 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.

In the last half decade XinJiang Ba Yi Iron & SteelLtd saw its share price fall as its EPS declined below zero. At present it's hard to make valid comparisons between EPS and the share price. However, we can say we'd expect to see a falling share price in this scenario.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into XinJiang Ba Yi Iron & SteelLtd's key metrics by checking this interactive graph of XinJiang Ba Yi Iron & SteelLtd's earnings, revenue and cash flow.

A Different Perspective

While it's never nice to take a loss, XinJiang Ba Yi Iron & SteelLtd shareholders can take comfort that their trailing twelve month loss of 7.4% wasn't as bad as the market loss of around 9.8%. Given the total loss of 3% per year over five years, it seems returns have deteriorated in the last twelve months. Whilst Baron Rothschild does tell the investor "buy when there's blood in the streets, even if the blood is your own", buyers would need to examine the data carefully to be comfortable that the business itself is sound. You could get a better understanding of XinJiang Ba Yi Iron & SteelLtd's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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.