Would Shareholders Who Purchased Embry Holdings' (HKG:1388) Stock Five Years Be Happy With The Share price Today?

We think intelligent long term investing is the way to go. But no-one is immune from buying too high. For example, after five long years the Embry Holdings Limited (HKG:1388) share price is a whole 75% lower. That's an unpleasant experience for long term holders. And some of the more recent buyers are probably worried, too, with the stock falling 32% in the last year. The silver lining is that the stock is up 3.0% in about a week.

View our latest analysis for Embry 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 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).

Over five years Embry Holdings' earnings per share dropped significantly, falling to a loss, with the share price also lower. The recent extraordinary items contributed to this situation. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But we would generally expect a lower price, given the situation.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Embry Holdings' total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Embry Holdings shareholders, and that cash payout explains why its total shareholder loss of 70%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

Embry Holdings shareholders are down 30% for the year, but the market itself is up 7.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. 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. 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. Take risks, for example - Embry Holdings has 2 warning signs (and 1 which can't be ignored) we think you should know about.

But note: Embry Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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