If You Had Bought Keck Seng Investments (Hong Kong)'s (HKG:184) Shares Three Years Ago You Would Be Down 54%

Keck Seng Investments (Hong Kong) Limited (HKG:184) shareholders should be happy to see the share price up 12% in the last quarter. But that is small recompense for the exasperating returns over three years. Regrettably, the share price slid 54% in that period. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

See our latest analysis for Keck Seng Investments (Hong Kong)

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...' 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.

Keck Seng Investments (Hong Kong) saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Extraordinary items contributed to this situation. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Keck Seng Investments (Hong Kong)'s 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 Keck Seng Investments (Hong Kong)'s share price action, but we should also mention its total shareholder return (TSR). 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. Its history of dividend payouts mean that Keck Seng Investments (Hong Kong)'s TSR, which was a 51% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

While the broader market gained around 23% in the last year, Keck Seng Investments (Hong Kong) shareholders lost 32%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Keck Seng Investments (Hong Kong) , and understanding them should be part of your investment process.

We will like Keck Seng Investments (Hong Kong) better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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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