Is Da Ming International Holdings' (HKG:1090) Share Price Gain Of 135% Well Earned?

By
Simply Wall St
Published
May 30, 2021
SEHK:1090
Source: Shutterstock

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Da Ming International Holdings Limited (HKG:1090) share price has soared 135% in the last year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 36% in about a quarter. The longer term returns have not been as good, with the stock price only 12% higher than it was three years ago.

Check out our latest analysis for Da Ming International Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

During the last year Da Ming International Holdings grew its earnings per share (EPS) by 96%. The share price gain of 135% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

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

earnings-per-share-growth
SEHK:1090 Earnings Per Share Growth May 31st 2021

This free interactive report on Da Ming International Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Da Ming International Holdings shareholders have received a total shareholder return of 135% over one year. That's including the dividend. That gain is better than the annual TSR over five years, which is 3%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Da Ming International Holdings better, we need to consider many other factors. For instance, we've identified 3 warning signs for Da Ming International Holdings (1 is potentially serious) that you should be aware of.

But note: Da Ming International Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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