As an investor, mistakes are inevitable. But really big losses can really drag down an overall portfolio. So take a moment to sympathize with the long term shareholders of Grange Resources Limited (ASX:GRR), who have seen the share price tank a massive 84% over a three year period. That’d be enough to cause even the strongest minds some disquiet. The more recent news is of little comfort, with the share price down 54% in a year. Furthermore, it’s down 16% in about a quarter. That’s not much fun for holders. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.

It’s worthwhile assessing if the company’s economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let’s do just that.

Our free stock report includes 3 warning signs investors should be aware of before investing in Grange Resources. Read for free now.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Grange Resources saw its EPS decline at a compound rate of 43% per year, over the last three years. This fall in EPS isn’t far from the rate of share price decline, which was 46% per year. That suggests that the market sentiment around the company hasn’t changed much over that time, despite the disappointment. Rather, the share price has approximately tracked EPS growth.

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

This free interactive report on Grange Resources’ earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

Grange Resources shareholders are down 53% for the year (even including dividends), but the market itself is up 8.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we’ve spotted with Grange Resources (including 1 which is concerning) .