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Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Telecom Service One Holdings Limited (HKG:3997) stock has had a really bad year. In that relatively short period, the share price has plunged 64%. Even if you look out three years, the returns are still disappointing, with the share price down (the share price is down 49%) in that time. Shareholders have had an even rougher run lately, with the share price down 25% in the last 90 days.
View our latest analysis for Telecom Service One Holdings
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, Telecom Service One Holdings had to report a 63% decline in EPS over the last year. Remarkably, he share price decline of 64% per year is particularly close to the EPS drop. So it seems that the market sentiment has not changed much, despite the weak results. Rather, the share price has approximately tracked EPS growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Telecom Service One Holdings's earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Telecom Service One Holdings's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Telecom Service One Holdings shareholders, and that cash payout explains why its total shareholder loss of 63%, over the last year, isn't as bad as the share price return.
A Different Perspective
While the broader market gained around 2.3% in the last year, Telecom Service One Holdings shareholders lost 63% (even including dividends) . However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 0.5%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. If you would like to research Telecom Service One Holdings in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.