Update: Pine Care Group (HKG:1989) Stock Gained 49% In The Last Three Years

It might be of some concern to shareholders to see the Pine Care Group Limited (HKG:1989) share price down 22% in the last month. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 49% during that period.

See our latest analysis for Pine Care Group

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Pine Care Group was able to grow its EPS at 19% per year over three years, sending the share price higher. The average annual share price increase of 14% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time. Having said that, the market is still optimistic, given the P/E ratio of 58.43.

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

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..

What about the Total Shareholder Return (TSR)?

We've already covered Pine Care Group's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Pine Care Group shareholders, and that cash payout contributed to why its TSR of 57%, over the last 3 years, is better than the share price return.

A Different Perspective

The last twelve months weren't great for Pine Care Group shares, which cost holders 31%, while the market was up about 23%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 16% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Pine Care Group is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

Pine Care Group is not the only stock that insiders are buying. 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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