If You Had Bought Zengame Technology Holding (HKG:2660) Shares A Year Ago You'd Have Earned 75% Returns

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Zengame Technology Holding Limited (HKG:2660) share price is 75% higher than it was a year ago, much better than the market return of around 7.1% (not including dividends) in the same period. So that should have shareholders smiling. Zengame Technology Holding hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Zengame Technology Holding

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.

Zengame Technology Holding was able to grow EPS by 46% in the last twelve months. The share price gain of 75% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

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

We know that Zengame Technology Holding has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Zengame Technology Holding will grow revenue in the future.

What about the Total Shareholder Return (TSR)?

We've already covered Zengame Technology Holding's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Zengame Technology Holding shareholders, and that cash payout contributed to why its TSR of 81%, over the last year, is better than the share price return.

A Different Perspective

It's nice to see that Zengame Technology Holding shareholders have gained 81% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 1.8%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zengame Technology Holding , and understanding them should be part of your investment process.

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.

If you decide to trade Zengame Technology Holding, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.