How Much Did Shanghai Gench Education Group's(HKG:1525) Shareholders Earn From Share Price Movements Over The Last Year?

The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Shanghai Gench Education Group Limited (HKG:1525) share price is down 10% in the last year. That's well below the market return of 12%. Shanghai Gench Education Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The last week also saw the share price slip down another 5.4%.

View our latest analysis for Shanghai Gench Education Group

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. 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.

Unfortunately Shanghai Gench Education Group reported an EPS drop of 9.2% for the last year. We note that the 10% share price drop is very close to the EPS drop. Given the lower EPS we might have expected investors to lose confidence in the stock, but that doesn't seemed to have happened. Rather, the share price has approximately tracked EPS growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Shanghai Gench Education Group's earnings, revenue and cash flow.

A Different Perspective

While Shanghai Gench Education Group shareholders are down 9.1% for the year, the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 4.5% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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 2 warning signs for Shanghai Gench Education Group that you should be aware of.

Shanghai Gench Education Group 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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