Stock Analysis

Regal Real Estate Investment Trust's (HKG:1881) Stock Price Has Reduced 43% In The Past Three Years

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SEHK:1881
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Regal Real Estate Investment Trust (HKG:1881) shareholders should be happy to see the share price up 17% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 43% in the last three years, significantly under-performing the market.

View our latest analysis for Regal Real Estate Investment Trust

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Regal Real Estate Investment Trust saw its share price decline over the three years in which its EPS also dropped, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

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

earnings-per-share-growth
SEHK:1881 Earnings Per Share Growth December 14th 2020

It might be well worthwhile taking a look at our free report on Regal Real Estate Investment Trust's 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. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Regal Real Estate Investment Trust the TSR over the last 3 years was -29%, 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

Regal Real Estate Investment Trust shareholders are down 21% for the year (even including dividends), but the market itself is up 8.0%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 0.5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Regal Real Estate Investment Trust you should be aware of, and 1 of them is significant.

Of course Regal Real Estate Investment Trust may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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