Precious Dragon Technology Holdings (HKG:1861) Shareholders Have Enjoyed A 21% Share Price Gain

Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Precious Dragon Technology Holdings Limited (HKG:1861) share price is up 21% in the last year, clearly besting the market return of around 3.2% (not including dividends). That's a solid performance by our standards! Precious Dragon Technology Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Precious Dragon Technology Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Precious Dragon Technology Holdings was able to grow EPS by 37% in the last twelve months. It's fair to say that the share price gain of 21% did not keep pace with the EPS growth. So it seems like the market has cooled on Precious Dragon Technology Holdings, despite the growth. Interesting. The caution is also evident in the lowish P/E ratio of 10.15.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Precious Dragon Technology Holdings' earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. We note that for Precious Dragon Technology Holdings the TSR over the last year was 24%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Precious Dragon Technology Holdings shareholders have gained 24% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 17% in that time. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Precious Dragon Technology Holdings better, we need to consider many other factors. Even so, be aware that Precious Dragon Technology Holdings is showing 5 warning signs in our investment analysis , and 2 of those are a bit concerning...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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