While it may not be enough for some shareholders, we think it is good to see the CENIT Aktiengesellschaft (ETR:CSH) share price up 12% in a single quarter. But in truth the last year hasn’t been good for the share price. The cold reality is that the stock has dropped 33% in one year, under-performing the market.

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.

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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.

Unfortunately CENIT reported an EPS drop of 59% for the last year. The share price fall of 33% isn’t as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment — or it may have expected earnings to drop faster.

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 CENIT’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

While the broader market gained around 16% in the last year, CENIT shareholders lost 33% (even including dividends). 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. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.3% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We’ve identified 3 warning signs with CENIT (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.