Introducing Kwung's Holdings (HKG:1925), A Stock That Climbed 12% In The Last Year

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Kwung's Holdings Limited (HKG:1925) share price is up 12% in the last year, clearly besting the market return of around 7.2% (not including dividends). So that should have shareholders smiling. We'll need to follow Kwung's Holdings for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Kwung's Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 last year, Kwung's Holdings actually saw its earnings per share drop 73%.

Given the share price gain, we doubt the market is measuring progress with EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

Kwung's Holdings' revenue actually dropped 9.8% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of Kwung's Holdings' earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Kwung's Holdings' share price action, but we should also mention its total shareholder return (TSR). 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. We note that Kwung's Holdings' TSR, at 18% is higher than its share price return of 12%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

It's nice to see that Kwung's Holdings shareholders have gained 18% over the last year. And the share price momentum remains respectable, with a gain of 23% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Kwung's Holdings better, we need to consider many other factors. Even so, be aware that Kwung's Holdings is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Kwung's Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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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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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