If You Had Bought Sa Sa International Holdings' (HKG:178) Shares Three Years Ago You Would Be Down 64%

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Sa Sa International Holdings Limited (HKG:178) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 64% drop in the share price over that period. The more recent news is of little comfort, with the share price down 35% in a year. There was little comfort for shareholders in the last week as the price declined a further 2.5%.

Check out our latest analysis for Sa Sa International 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).

Over the three years that the share price declined, Sa Sa International Holdings' earnings per share (EPS) dropped significantly, 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 company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Sa Sa International Holdings' key metrics by checking this interactive graph of Sa Sa International Holdings's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Sa Sa International Holdings' total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Sa Sa International Holdings' TSR, which was a 60% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

While the broader market gained around 12% in the last year, Sa Sa International Holdings shareholders lost 35%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

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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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