The 19% return this week takes Dingyi Group Investment's (HKG:508) shareholders one-year gains to 174%

By
Simply Wall St
Published
August 26, 2021
SEHK:508
Source: Shutterstock

Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Dingyi Group Investment Limited (HKG:508) share price has soared 174% return in just a single year. It's also good to see the share price up 27% over the last quarter. On the other hand, longer term shareholders have had a tougher run, with the stock falling 84% in three years.

Since it's been a strong week for Dingyi Group Investment shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Dingyi Group Investment

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the last year Dingyi Group Investment grew its earnings per share, moving from a loss to a profit.

We think the growth looks very prospective, so we're not surprised the market liked it too. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.

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

earnings-per-share-growth
SEHK:508 Earnings Per Share Growth August 27th 2021

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

It's good to see that Dingyi Group Investment has rewarded shareholders with a total shareholder return of 174% in the last twelve months. Notably the five-year annualised TSR loss of 13% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Dingyi Group Investment better, we need to consider many other factors. Take risks, for example - Dingyi Group Investment has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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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