Golden Throat Holdings Group's (HKG:6896) Stock Price Has Reduced 68% In The Past Five Years

Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. Zooming in on an example, the Golden Throat Holdings Group Company Limited (HKG:6896) share price dropped 68% in the last half decade. We certainly feel for shareholders who bought near the top. There was little comfort for shareholders in the last week as the price declined a further 1.4%.

View our latest analysis for Golden Throat Holdings Group

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 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.

During the five years over which the share price declined, Golden Throat Holdings Group's earnings per share (EPS) dropped by 16% each year. This reduction in EPS is less than the 20% annual reduction in the share price. This implies that the market is more cautious about the business these days. The less favorable sentiment is reflected in its current P/E ratio of 6.47.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Golden Throat Holdings Group's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Golden Throat Holdings Group's TSR for the last 5 years was -57%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Golden Throat Holdings Group shareholders have received a total shareholder return of 31% over the last year. Of course, that includes the dividend. That certainly beats the loss of about 9% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Golden Throat Holdings Group (of which 1 is concerning!) you should know about.

If you are like me, then you will not want to miss this free list of growing companies that insiders are 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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