Generally speaking long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example, after five long years the C Cheng Holdings Limited (HKG:1486) share price is a whole 62% lower. That's an unpleasant experience for long term holders. And some of the more recent buyers are probably worried, too, with the stock falling 50% in the last year. Furthermore, it's down 21% in about a quarter. That's not much fun for holders. However, one could argue that the price has been influenced by the general market, which is down 9.7% in the same timeframe.

View our latest analysis for C Cheng Holdings

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

In the last half decade C Cheng Holdings saw its share price fall as its EPS declined below zero. The recent extraordinary items contributed to this situation. At present it's hard to make valid comparisons between EPS and the share price. But we would generally expect a lower price, given the situation.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on C Cheng Holdings's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between C Cheng Holdings's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for C Cheng Holdings shareholders, and that cash payout explains why its total shareholder loss of 60%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

While the broader market lost about 7.6% in the twelve months, C Cheng Holdings shareholders did even worse, losing 50%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 17% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand C Cheng Holdings better, we need to consider many other factors. Take risks, for example - C Cheng Holdings has 3 warning signs (and 1 which is significant) we think you should know about.

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 HK exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.