Strong week for Value Partners Group shareholders (HKG: 806) does not ease the pain of the loss of five years
Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win some selections. So we wouldn’t blame in the long run Value Partners Group Limited (HKG: 806) for doubting their decision to hold, as the stock fell 48% in half a decade. Shareholders have had an even tougher time lately, with the stock price falling 21% in the past 90 days. But that could be related to the weakness of the market, which is down 8.8% over the same period.
On a more encouraging note, the company added HK $ 444 million to its market cap in the past 7 days alone. So let’s see if we can figure out what caused the five-year loss to shareholders.
See our latest analysis for Value Partners Group
While the markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just the underlying performance of the company. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
During five years of share price growth, Value Partners Group has gone from loss to profitability. Most would consider this to be a good thing, so it is counterintuitive to see the stock price fall. Other measures can better explain the evolution of the share price.
We can see that the dividend has remained healthy, which would not really explain the drop in the share price. We don’t immediately know why the stock price is falling, but more research may provide answers.
You can see how earnings and income have evolved over time below (find out the exact values ââby clicking on the image).
We love that insiders have bought stocks in the past twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide for the business. This free report showing analyst forecasts should help you get an idea about Value Partners Group
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any discounted demerger or capital increase, as well as any dividend, based on the assumption that dividends are reinvested. Arguably, the TSR gives a more complete picture of the return generated by a stock. We note that for Value Partners Group the TSR over the last 5 years was -31%, which is better than the share price return mentioned above. And there’s no price guessing that dividend payments are a big part of the reason for the discrepancy!
A different perspective
It is good to see that Value Partners Group has rewarded its shareholders with a total shareholder return of 24% over the past twelve months. And that includes the dividend. This certainly beats the loss of around 6% per year over the past five years. The long-term loss makes us cautious, but the short-term TSR gain certainly points to a brighter future. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Like risks, for example. Every business has them, and we’ve spotted 3 warning signs for Value Partners Group (1 of which is a bit unpleasant!) to know.
Value Partners Group is not the only one to buy. So take a look at this free list of growing companies with insider buying.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on the Hong Kong stock exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St does not have any position in the mentioned stocks.
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