Clifford Modern Living Holdings Limited (HKG:3686) shareholders should be happy to see the share price up 13% in the last quarter. But in truth the last year hasn’t been good for the share price. In fact the stock is down 16% in the last year, well below the market return.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
During the unfortunate twelve months during which the Clifford Modern Living Holdings share price fell, it actually saw its earnings per share (EPS) improve by 28%. Of course, the situation might betray previous over-optimism about growth. It’s fair to say that the share price does not seem to be reflecting the EPS growth. But we might find some different metrics explain the share price movements better.
On the other hand, we’re certainly perturbed by the 6.5% decline in Clifford Modern Living Holdings’s revenue. If the market sees the weak revenue as jeopardising EPS, that could explain the lower share price.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Clifford Modern Living Holdings’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Clifford Modern Living Holdings shareholders are down 14% for the year (even including dividends), even worse than the market loss of 1.3%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. It’s great to see a nice little 13% rebound in the last three months. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).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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