While Shenzhen JPT Opto-Electronics Co., Ltd. (SHSE:688025) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 23% in the last quarter. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 35%: better than the market.

The past week has proven to be lucrative for Shenzhen JPT Opto-Electronics investors, so let's see if fundamentals drove the company's three-year performance.

See our latest analysis for Shenzhen JPT Opto-Electronics

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Over the last three years, Shenzhen JPT Opto-Electronics failed to grow earnings per share, which fell 9.3% (annualized).

So we doubt that the market is looking to EPS for its main judge of the company's value. Therefore, we think it's worth considering other metrics as well.

Languishing at just 0.6%, we doubt the dividend is doing much to prop up the share price. It could be that the revenue growth of 29% per year is viewed as evidence that Shenzhen JPT Opto-Electronics is growing. In that case, the company may be sacrificing current earnings per share to drive growth, and maybe shareholder's faith in better days ahead will be rewarded.

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

We know that Shenzhen JPT Opto-Electronics has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Shenzhen JPT Opto-Electronics' TSR for the last 3 years was 37%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Shenzhen JPT Opto-Electronics shareholders may not have made money over the last year, but their total loss of 9.9% ( including dividends) isn't as bad as the market loss of around 9.9%. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over three years. It's possible that the recent share price decline has more to do with the negative broader market returns than any company specific development. It's always interesting to track share price performance over the longer term. But to understand Shenzhen JPT Opto-Electronics better, we need to consider many other factors. Even so, be aware that Shenzhen JPT Opto-Electronics is showing 3 warning signs in our investment analysis , you should know about...

We will like Shenzhen JPT Opto-Electronics better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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