JY Grandmark Holdings (HKG:2231) stock falls 12% in past week as one-year earnings and shareholder returns continue downward trend

By
Simply Wall St
Published
March 21, 2022
SEHK:2231
Source: Shutterstock

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the JY Grandmark Holdings Limited (HKG:2231) share price is down 32% in the last year. That's disappointing when you consider the market declined 21%. JY Grandmark Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Unfortunately the share price momentum is still quite negative, with prices down 17% in thirty days. But this could be related to poor market conditions -- stocks are down 11% in the same time.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for JY Grandmark Holdings

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

Unhappily, JY Grandmark Holdings had to report a 21% decline in EPS over the last year. This reduction in EPS is not as bad as the 32% share price fall. So it seems the market was too confident about the business, a year ago. The less favorable sentiment is reflected in its current P/E ratio of 6.18.

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

earnings-per-share-growth
SEHK:2231 Earnings Per Share Growth March 21st 2022

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). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for JY Grandmark Holdings the TSR over the last 1 year was -30%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

JY Grandmark Holdings shareholders are down 30% for the year (even including dividends), even worse than the market loss of 21%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 3.6%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand JY Grandmark Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with JY Grandmark Holdings (including 1 which makes us a bit uncomfortable) .

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.

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