Should Qinqin Foodstuffs Group (Cayman) (HKG:1583) Be Disappointed With Their 14% Profit?

By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Qinqin Foodstuffs Group (Cayman) Company Limited (HKG:1583) share price is up 14% in the last three years, clearly besting the market decline of around 8.2% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 4.8% in the last year.

Check out our latest analysis for Qinqin Foodstuffs Group (Cayman)

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.

Qinqin Foodstuffs Group (Cayman) was able to grow its EPS at 29% per year over three years, sending the share price higher. The average annual share price increase of 4% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Qinqin Foodstuffs Group (Cayman)'s earnings, revenue and cash flow.

A Different Perspective

Over the last year Qinqin Foodstuffs Group (Cayman) shareholders have received a TSR of 4.8%. While you don't go broke making a profit, this return was actually lower than the average market return of about 14%. On the other hand, the TSR over three years was worse, at just 4% per year. This suggests the company's position is improving. If the share price is up as a result of improved business performance, then this kind of improvement may be sustained. It's always interesting to track share price performance over the longer term. But to understand Qinqin Foodstuffs Group (Cayman) better, we need to consider many other factors. For example, we've discovered 1 warning sign for Qinqin Foodstuffs Group (Cayman) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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