If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Deutsche Wohnen SE (ETR:DWNI) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 66% decline in the share price in that time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for Deutsche Wohnen

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 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.

We know that Deutsche Wohnen has been profitable in the past. However, it made a loss in the last twelve months, suggesting profit may be an unreliable metric at this stage. Other metrics may better explain the share price move.

With a rather small yield of just 0.2% we doubt that the stock's share price is based on its dividend. We think that the revenue decline over three years, at a rate of 9.4% per year, probably had some shareholders looking to sell. And that's not surprising, since it seems unlikely that EPS growth can continue for long in the absence of revenue growth.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Deutsche Wohnen will earn in the future (free profit forecasts).

A Different Perspective

While the broader market gained around 3.7% in the last year, Deutsche Wohnen shareholders lost 16% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% per year over five years. 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. 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. Case in point: We've spotted 1 warning sign for Deutsche Wohnen you should be aware of.