Further weakness as Jiangsu Lihua Animal Husbandry (SZSE:300761) drops 5.5% this week, taking five-year losses to 45%

In order to justify the effort of selecting individual stocks, it’s worth striving to beat the returns from a market index fund. But even the best stock picker will only win with some selections. So we wouldn’t blame long term Jiangsu Lihua Animal Husbandry Co., Ltd. (SZSE:300761) shareholders for doubting their decision to hold, with the stock down 49% over a half decade. The last week also saw the share price slip down another 5.5%. However, this move may have been influenced by the broader market, which fell 4.9% in that time.

After losing 5.5% this past week, it’s worth investigating the company’s fundamentals to see what we can infer from past performance.

Check out our latest analysis for Jiangsu Lihua Animal Husbandry

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 five years Jiangsu Lihua Animal Husbandry’s earnings per share dropped significantly, falling to a loss, with the share price also lower. Since the company has fallen to a loss making position, it’s hard to compare the change in EPS with the share price change. However, we can say we’d expect to see a falling share price in this scenario.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Jiangsu Lihua Animal Husbandry’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Jiangsu Lihua Animal Husbandry, it has a TSR of -45% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While it’s certainly disappointing to see that Jiangsu Lihua Animal Husbandry shares lost 6.0% throughout the year, that wasn’t as bad as the market loss of 20%. What is more upsetting is the 8% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. It’s always interesting to track share price performance over the longer term. But to understand Jiangsu Lihua Animal Husbandry better, we need to consider many other factors. For instance, we’ve identified 1 warning sign for Jiangsu Lihua Animal Husbandry that you should be aware of.

We will like Jiangsu Lihua Animal Husbandry 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 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.