Cosmos Machinery Enterprises (HKG:118) delivers shareholders 26% return over 1 year, surging 10% in the last week alone

By
Simply Wall St
Published
October 27, 2021
SEHK:118
Source: Shutterstock

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Cosmos Machinery Enterprises Limited (HKG:118) share price is 26% higher than it was a year ago, much better than the market return of around 6.3% (not including dividends) in the same period. That's a solid performance by our standards! Zooming out, the stock is up 21% in the last three years.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for Cosmos Machinery Enterprises

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 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).

Cosmos Machinery Enterprises went from making a loss to reporting a profit, in the last year.

The result looks like a strong improvement to us, so we're not surprised the market likes the growth. Inflection points like this can be a great time to take a closer look at a company.

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

earnings-per-share-growth
SEHK:118 Earnings Per Share Growth October 27th 2021

This free interactive report on Cosmos Machinery Enterprises' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Cosmos Machinery Enterprises shareholders have received a total shareholder return of 26% over the last year. There's no doubt those recent returns are much better than the TSR loss of 0.6% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Cosmos Machinery Enterprises better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Cosmos Machinery Enterprises you should be aware of.

We will like Cosmos Machinery Enterprises 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.

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