Those Who Purchased Kingland Group Holdings (HKG:1751) Shares A Year Ago Have A 22% Loss To Show For It
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Kingland Group Holdings Limited (HKG:1751) share price is down 22% in the last year. That's disappointing when you consider the market returned -4.5%. We wouldn't rush to judgement on Kingland Group Holdings because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.
Check out our latest analysis for Kingland Group Holdings
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 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.
Unfortunately Kingland Group Holdings reported an EPS drop of 19% for the last year. This proportional reduction in earnings per share isn't far from the 22% decrease in the share price. Given the lower EPS we might have expected investors to lose confidence in the stock, but that doesn't seemed to have happened. Rather, the share price has approximately tracked EPS growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Kingland Group Holdings's key metrics by checking this interactive graph of Kingland Group Holdings's earnings, revenue and cash flow.
A Different Perspective
We doubt Kingland Group Holdings shareholders are happy with the loss of 22% over twelve months. That falls short of the market, which lost 4.5%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 13% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before deciding if you like the current share price, check how Kingland Group Holdings scores on these 3 valuation metrics.
But note: Kingland Group 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 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 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.
