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Winson Holdings Hong Kong Limited (HKG:8421) shareholders should be happy to see the share price up 27% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 18% in the last year, significantly under-performing the market.
See our latest analysis for Winson Holdings Hong Kong
There is no denying that markets are sometimes efficient, but prices do not always reflect 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.
Unfortunately Winson Holdings Hong Kong reported an EPS drop of 4.4% for the last year. The share price decline of 18% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Winson Holdings Hong Kong, it has a TSR of -15% for the last year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Given that the market gained 0.3% in the last year, Winson Holdings Hong Kong shareholders might be miffed that they lost 15% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 27% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Keeping this in mind, a solid next step might be to take a look at Winson Holdings Hong Kong's dividend track record. This free interactive graph is a great place to start.
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