The SiS International Holdings (HKG:529) Share Price Is Down 34% So Some Shareholders Are Getting Worried

The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by SiS International Holdings Limited (HKG:529) shareholders over the last year, as the share price declined 34%. That’s well bellow the market return of -6.3%. We note that it has not been easy for shareholders over three years, either; the share price is down 32% in that time. Furthermore, it’s down 18% in about a quarter. That’s not much fun for holders.

See our latest analysis for SiS International 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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unfortunately SiS International Holdings reported an EPS drop of 38% for the last year. This proportional reduction in earnings per share isn’t far from the 34% decrease in the share price. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Rather, the share price has approximately tracked EPS growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

SEHK:529 Past and Future Earnings, February 28th 2020
SEHK:529 Past and Future Earnings, February 28th 2020

It might be well worthwhile taking a look at our free report on SiS International Holdings’s earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We’d be remiss not to mention the difference between SiS International Holdings’s total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that SiS International Holdings’s TSR, which was a 33% drop over the last year, was not as bad as the share price return.

A Different Perspective

While the broader market lost about 6.3% in the twelve months, SiS International Holdings shareholders did even worse, losing 33% (even including dividends) . However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 3.4% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It’s always interesting to track share price performance over the longer term. But to understand SiS International Holdings better, we need to consider many other factors. For instance, we’ve identified 5 warning signs for SiS International Holdings (1 is a bit concerning) that you should be aware of.

We will like SiS International Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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.

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. Thank you for reading.