Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) shareholders might understandably be very concerned that the share price has dropped 33% in the last quarter. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 39% in that time.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Yangzijiang Shipbuilding (Holdings) was able to grow its EPS at 32% per year over three years, sending the share price higher. This EPS growth is higher than the 12% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.37.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Yangzijiang Shipbuilding (Holdings) has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Yangzijiang Shipbuilding (Holdings) stock, you should check out this FREE detailed report on its balance sheet.
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 spin-offs or 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 Yangzijiang Shipbuilding (Holdings) the TSR over the last 3 years was 55%, 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
Yangzijiang Shipbuilding (Holdings) shareholders are down 11% for the year (even including dividends) , but the market itself is up 2.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 0.9% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Yangzijiang Shipbuilding (Holdings) it might be wise to click here to see if insiders have been buying or selling shares.
But note: Yangzijiang Shipbuilding (Holdings) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SG exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.