In This Article:
It is a pleasure to report that the Best Pacific International Holdings Limited (HKG:2111) is up 53% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 36% in the last three years, significantly under-performing the market.
Check out our latest analysis for Best Pacific International Holdings
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).
Best Pacific International Holdings saw its EPS decline at a compound rate of 6.6% per year, over the last three years. This reduction in EPS is slower than the 14% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. The less favorable sentiment is reflected in its current P/E ratio of 10.79.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Best Pacific International Holdings's key metrics by checking this interactive graph of Best Pacific International Holdings's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Best Pacific International Holdings, it has a TSR of -32% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
The last twelve months weren't great for Best Pacific International Holdings shares, which performed worse than the market, costing holders 4.2%, including dividends. Meanwhile, the broader market slid about 3.4%, likely weighing on the stock. Unfortunately, the longer term story isn't pretty, with investment losses running at 12% per year over three years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Before forming an opinion on Best Pacific International Holdings you might want to consider these 3 valuation metrics.