The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the A.Plus Group Holdings Limited (HKG:1841) share price is down 10% in the last year. That's disappointing when you consider the market returned 2.1%. On the bright side, the stock is actually up 5.3% in the last three years. In the last ninety days we've seen the share price slide 20%.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, A.Plus Group Holdings had to report a 32% decline in EPS over the last year. This fall in the EPS is significantly worse than the 10% the share price fall. It may have been that the weak EPS was not as bad as some had feared.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on A.Plus Group Holdings's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, A.Plus Group Holdings's TSR for the last year was 1.8%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
A.Plus Group Holdings produced a TSR of 1.8% over the last year. Unfortunately this falls short of the market return of around 2.1%. But the (superior) three-year TSR of 7.5% per year is some consolation. Even the best companies don't see strong share price performance every year. Before forming an opinion on A.Plus Group Holdings you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
We will like A.Plus Group Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK 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 firstname.lastname@example.org. 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.