Can You Imagine How Tsit Wing International Holdings' (HKG:2119) Shareholders Feel About The 13% Share Price Increase?

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But not every stock you buy will perform as well as the overall market. Over the last year the Tsit Wing International Holdings Limited (HKG:2119) share price is up 13%, but that's less than the broader market return. Tsit Wing International Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Tsit Wing International Holdings

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Over the last twelve months, Tsit Wing International Holdings actually shrank its EPS by 12%.

This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We haven't seen Tsit Wing International Holdings increase dividend payments yet, so the yield probably hasn't helped drive the share higher. Revenue actually dropped 19% over last year. Usually that correlates with a lower share price, but let's face it, the gyrations of the market are sometimes only as clear as mud.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

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. We note that for Tsit Wing International Holdings the TSR over the last year was 18%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We're happy to report that Tsit Wing International Holdings are up 18% over the year (even including dividends). Unfortunately this falls short of the market return of around 43%. The last three months haven't been great for shareholder returns, since the share price has trailed the market by 7.5% in the last three months. It might be that investors are more concerned about the business lately due to some fundamental change (or else the share price simply got ahead of itself, previously). It's always interesting to track share price performance over the longer term. But to understand Tsit Wing International Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Tsit Wing International Holdings that you should be aware of.

Tsit Wing International Holdings 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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