Advertisement
U.S. markets open in 40 minutes
  • S&P Futures

    5,305.50
    -2.75 (-0.05%)
     
  • Dow Futures

    40,150.00
    +6.00 (+0.01%)
     
  • Nasdaq Futures

    18,491.75
    -12.00 (-0.06%)
     
  • Russell 2000 Futures

    2,139.00
    +0.60 (+0.03%)
     
  • Crude Oil

    82.73
    +1.38 (+1.70%)
     
  • Gold

    2,229.50
    +16.80 (+0.76%)
     
  • Silver

    24.70
    -0.05 (-0.21%)
     
  • EUR/USD

    1.0797
    -0.0033 (-0.30%)
     
  • 10-Yr Bond

    4.2280
    +0.0320 (+0.76%)
     
  • Vix

    12.99
    +0.21 (+1.64%)
     
  • GBP/USD

    1.2626
    -0.0012 (-0.10%)
     
  • USD/JPY

    151.2630
    +0.0170 (+0.01%)
     
  • Bitcoin USD

    70,423.09
    +369.18 (+0.53%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,950.93
    +18.95 (+0.24%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Introducing China Jinjiang Environment Holding (SGX:BWM), A Stock That Climbed 30% In The Last Year

The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the China Jinjiang Environment Holding Company Limited (SGX:BWM) share price is up 30% in the last year, clearly besting the market return of around 4.1% (not including dividends). That's a solid performance by our standards! Unfortunately the longer term returns are not so good, with the stock falling 29% in the last three years.

See our latest analysis for China Jinjiang Environment Holding

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year, China Jinjiang Environment Holding actually saw its earnings per share drop 12%.

This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

However the year on year revenue growth of 12% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

SGX:BWM Income Statement, November 12th 2019
SGX:BWM Income Statement, November 12th 2019

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What about the Total Shareholder Return (TSR)?

We've already covered China Jinjiang Environment Holding's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for China Jinjiang Environment Holding shareholders, and that cash payout contributed to why its TSR of 30%, over the last year, is better than the share price return.

A Different Perspective

Pleasingly, China Jinjiang Environment Holding's total shareholder return last year was 30%. This recent result is much better than the 6.0% drop suffered by shareholders each year (on average) over the last three. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. Before deciding if you like the current share price, check how China Jinjiang Environment Holding scores on these 3 valuation metrics.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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 editorial-team@simplywallst.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.

Advertisement