Nanjing Sinolife United Company Limited (HKG:3332) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But over three years the performance has been really wonderful. Indeed, the share price is up a whopping 328% in that time. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. The share price action could signify that the business itself is dramatically improved, in that time.

The past week has proven to be lucrative for Nanjing Sinolife United investors, so let's see if fundamentals drove the company's three-year performance.

View our latest analysis for Nanjing Sinolife United

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years of share price growth, Nanjing Sinolife United moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

This free interactive report on Nanjing Sinolife United's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Nanjing Sinolife United shareholders have received a total shareholder return of 186% over one year. That gain is better than the annual TSR over five years, which is 30%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Nanjing Sinolife United better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Nanjing Sinolife United .

We will like Nanjing Sinolife United better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Hong Kong exchanges.

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