What Would Shareholders Who Purchased Luen Thai Holdings'(HKG:311) Stock Five Years Ago Be Earning on Their Investment Today?

Luen Thai Holdings Limited (HKG:311) shareholders should be happy to see the share price up 18% in the last month. But if you look at the last five years the returns have not been good. In fact, the share price is down 65%, which falls well short of the return you could get by buying an index fund.

View our latest analysis for Luen Thai Holdings

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

In the last half decade Luen Thai Holdings saw its share price fall as its EPS declined below zero. At present it's hard to make valid comparisons between EPS and the share price. But we would generally expect a lower price, given the situation.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

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

What about the Total Shareholder Return (TSR)?

We've already covered Luen Thai 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. Its history of dividend payouts mean that Luen Thai Holdings' TSR, which was a 20% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

Luen Thai Holdings shareholders are down 46% for the year, but the market itself is up 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Luen Thai Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Luen Thai Holdings you should be aware of.

But note: Luen Thai 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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