Optimism for Wai Yuen Tong Medicine Holdings (HKG:897) has grown this past week, despite one-year decline in earnings

While it may not be enough for some shareholders, we think it is good to see the Wai Yuen Tong Medicine Holdings Limited (HKG:897) share price up 23% in a single quarter.

The recent uptick of 19% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Wai Yuen Tong Medicine Holdings

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the last year Wai Yuen Tong Medicine Holdings grew its earnings per share, moving from a loss to a profit.

We're surprised that the share price is lower given that improvement. If the improved profitability is a sign of things to come, then right now may prove the perfect time to pop this stock on your watchlist.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Wai Yuen Tong Medicine Holdings' key metrics by checking this interactive graph of Wai Yuen Tong Medicine Holdings'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 is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Wai Yuen Tong Medicine Holdings the TSR over the last 1 year was 569%, 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

We're pleased to report that Wai Yuen Tong Medicine Holdings shareholders have received a total shareholder return of 569% over one year. And that does include the dividend. That's better than the annualised return of 52% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Wai Yuen Tong Medicine Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Wai Yuen Tong Medicine Holdings you should be aware of.

But note: Wai Yuen Tong Medicine 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 Hong Kong exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.