If you love investing in stocks you're bound to buy some losers. But long term Hang Sang (Siu Po) International Holding Company Limited (HKG:3626) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 69% share price collapse, in that time. The more recent news is of little comfort, with the share price down 30% in a year. The falls have accelerated recently, with the share price down 12% in the last three months.
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.
During the three years that the share price fell, Hang Sang (Siu Po) International Holding's earnings per share (EPS) dropped by 26% each year. This reduction in EPS is slower than the 32% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. Of course, with a P/E ratio of 87.31, the market remains optimistic.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Hang Sang (Siu Po) International Holding's key metrics by checking this interactive graph of Hang Sang (Siu Po) International Holding's earnings, revenue and cash flow.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Hang Sang (Siu Po) International Holding's TSR for the last 3 years was -65%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Hang Sang (Siu Po) International Holding shareholders are down 26% for the year (even including dividends) , falling short of the market return. Meanwhile, the broader market slid about 2.5%, likely weighing on the stock. However, the loss over the last year isn't as bad as the 30% 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. Importantly, we haven't analysed Hang Sang (Siu Po) International Holding's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.
We will like Hang Sang (Siu Po) International Holding 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.
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.
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. Thank you for reading.