Unfortunately, investing is risky – companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the CSC Financial Co., Ltd. (HKG:6066) share price had more than doubled in just one year – up 116%. Also pleasing for shareholders was the 70% gain in the last three months. Also impressive, the stock is up 64% over three years, making long term shareholders happy, too.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 CSC Financial grew its earnings per share (EPS) by 120%. The similarity between the EPS growth and the 116% share price gain really stands out. This makes us think the market hasn’t really changed its sentiment around the company, in the last year. It looks like the share price is responding to the EPS.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that CSC Financial has improved its bottom line lately, but is it going to grow revenue? Check if analysts think CSC Financial will grow revenue in the future.
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 spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of CSC Financial, it has a TSR of 123% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We’re pleased to report that CSC Financial rewarded shareholders with a total shareholder return of 123% over the last year. That’s including the dividend. That gain actually surpasses the 22% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting CSC Financial on your watchlist. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that CSC Financial is showing 2 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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