If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Wuxi Sunlit Science and Technology Company Limited (HKG:1289) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 55% decline in the share price in that time. The falls have accelerated recently, with the share price down 26% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 11% in the same timeframe.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Wuxi Sunlit Science and Technology became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
Revenue is actually up 41% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worht worth investigating Wuxi Sunlit Science and Technology further; while we may be missing something on this analysis, there might also be an opportunity.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Wuxi Sunlit Science and Technology's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Wuxi Sunlit Science and Technology, it has a TSR of -51% 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
Wuxi Sunlit Science and Technology shareholders are down 12% for the year (even including dividends), falling short of the market return. Meanwhile, the broader market slid about 10%, likely weighing on the stock. However, the loss over the last year isn't as bad as the 21% per annum loss investors have suffered over the last 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 Wuxi Sunlit Science and Technology you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.