In This Article:
Precision Tsugami (China) Corporation Limited (HKG:1651) shareholders should be happy to see the share price up 21% in the last month. But that doesn’t change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 23% in the last year, well below the market return.
Check out our latest analysis for Precision Tsugami (China)
To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ 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.
Even though the Precision Tsugami (China) share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth. The divergence between the EPS and the share price is quite notable, during the year. So it’s well worth checking out some other metrics, too.
Precision Tsugami (China) managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don’t readily explain the share price drop, there might be an opportunity if the market has overreacted.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Precision Tsugami (China) in this interactive graph of future profit estimates.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Precision Tsugami (China) the TSR over the last year was -19%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Precision Tsugami (China) shareholders are down 19% for the year (even including dividends), even worse than the market loss of 5.1%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. Putting aside the last twelve months, it’s good to see the share price has rebounded by 8.7%, in the last ninety days. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.