Update: DaChan Food (Asia) (HKG:3999) Stock Gained 54% In The Last Year

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. For example, the DaChan Food (Asia) Limited (HKG:3999) share price is up 54% in the last year, clearly besting the market return of around 11% (not including dividends). That's a solid performance by our standards! It is also impressive that the stock is up 48% over three years, adding to the sense that it is a real winner.

View our latest analysis for DaChan Food (Asia)

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.

DaChan Food (Asia) was able to grow EPS by 329% in the last twelve months. This EPS growth is significantly higher than the 54% increase in the share price. So it seems like the market has cooled on DaChan Food (Asia), despite the growth. Interesting. This cautious sentiment is reflected in its (fairly low) P/E ratio of 3.31.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on DaChan Food (Asia)'s earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that DaChan Food (Asia) shareholders have received a total shareholder return of 54% over one year. That's better than the annualised return of 0.2% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand DaChan Food (Asia) better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with DaChan Food (Asia) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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