How Much Did Huajin International Holdings'(HKG:2738) Shareholders Earn From Share Price Movements Over The Last Three Years?

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term Huajin International Holdings Limited (HKG:2738) shareholders, since the share price is down 15% in the last three years, falling well short of the market decline of around 6.6%. The good news is that the stock is up 1.6% in the last week.

Check out our latest analysis for Huajin International Holdings

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

Huajin International Holdings saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Huajin International Holdings the TSR over the last 3 years was -9.9%, 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

Huajin International Holdings produced a TSR of 8.7% over the last year. While you don't go broke making a profit, this return was actually lower than the average market return of about 23%. The silver lining is that the recent rise is far preferable to the annual loss of 3.2% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. It's always interesting to track share price performance over the longer term. But to understand Huajin International Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Huajin International Holdings (including 2 which are concerning) .

But note: Huajin 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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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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