How Much Did Able Engineering Holdings'(HKG:1627) Shareholders Earn From Share Price Movements Over The Last Three Years?

It is doubtless a positive to see that the Able Engineering Holdings Limited (HKG:1627) share price has gained some 32% in the last three months.

Check out our latest analysis for Able Engineering Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over the three years that the share price declined, Able Engineering Holdings' earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Able Engineering Holdings' key metrics by checking this interactive graph of Able Engineering Holdings's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Able Engineering Holdings' total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Able Engineering Holdings' TSR of 2.1% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

While the market return was 7.6% in the last year, Able Engineering Holdings returned 7.9% to shareholders. That's not at all bad, but the cherry on top is that it's an improvement on prior returns (since shareholders only made 0.7% yearly over the last three years). It's good to see the uptick, although the business fundamentals will need to move in the right direction if the company is to sustain the rise. 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. For instance, we've identified 1 warning sign for Able Engineering Holdings that you should be aware of.

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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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