3SBio Inc. (HKG:1530) shareholders might be concerned after seeing the share price drop 19% in the last quarter. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 49%: better than the market.
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.
During three years of share price growth, 3SBio achieved compound earnings per share growth of 24% per year. The average annual share price increase of 14% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into 3SBio's key metrics by checking this interactive graph of 3SBio's earnings, revenue and cash flow.
A Different Perspective
The last twelve months weren't great for 3SBio shares, which cost holders 1.2%, while the market was up about 9.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 14% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It's always interesting to track share price performance over the longer term. But to understand 3SBio better, we need to consider many other factors. Be aware that 3SBio is showing 1 warning sign in our investment analysis , you should know about...
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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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