Yihai International Holding (HKG:1579) Shareholders Have Enjoyed A Whopping 915% Share Price Gain

For us, stock picking is in large part the hunt for the truly magnificent stocks. You won't get it right every time, but when you do, the returns can be truly splendid. One bright shining star stock has been Yihai International Holding Ltd. (HKG:1579), which is 915% higher than three years ago. In more good news, the share price has risen -5.3% in thirty days. But the price may well have benefitted from a buoyant market, since stocks have gained 8.4% in the last thirty days.

Anyone who held for that rewarding ride would probably be keen to talk about it.

View our latest analysis for Yihai International Holding

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 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 three years of share price growth, Yihai International Holding achieved compound earnings per share growth of 55% per year. This EPS growth is lower than the 117% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It's not unusual to see the market 're-rate' a stock, after a few years of growth. This optimism is also reflected in the fairly generous P/E ratio of 101.61.

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

It is of course excellent to see how Yihai International Holding has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Yihai International Holding's financial health with this free report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Yihai International Holding's TSR for the last 3 years was 930%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Yihai International Holding shareholders have gained 107% (in total) over the last year. That includes the value of the dividend. But the three year TSR of 118% per year is even better. If you would like to research Yihai International Holding in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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