Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in COSCO SHIPPING Ports Limited (HKG:1199), since the last five years saw the share price fall 40%. Unfortunately the share price momentum is still quite negative, with prices down 9.3% in thirty days. But this could be related to poor market conditions — stocks are down 8.6% in the same time.
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. 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.
Looking back five years, both COSCO SHIPPING Ports’s share price and EPS declined; the latter at a rate of 0.6% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 9.8% per year, over the period. This implies that the market is more cautious about the business these days. The less favorable sentiment is reflected in its current P/E ratio of 8.92.
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of COSCO SHIPPING Ports, it has a TSR of -22% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
While it’s never nice to take a loss, COSCO SHIPPING Ports shareholders can take comfort that, including dividends, their trailing twelve month loss of 1.2% wasn’t as bad as the market loss of around 7.7%. What is more upsetting is the 4.8% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. Before spending more time on COSCO SHIPPING Ports it might be wise to click here to see if insiders have been buying or selling shares.
Of course COSCO SHIPPING Ports may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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 email@example.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.