Stock Analysis

While shareholders of Enterprise Development Holdings (HKG:1808) are in the black over 1 year, those who bought a week ago aren't so fortunate

SEHK:1808
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Enterprise Development Holdings Limited (HKG:1808) shareholders have seen the share price descend 17% over the month. On the other hand, over the last twelve months the stock has delivered rather impressive returns. Indeed, the share price is up an impressive 219% in that time. So some might not be surprised to see the price retrace some. Only time will tell if there is still too much optimism currently reflected in the share price.

While the stock has fallen 12% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Enterprise Development Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 Enterprise Development Holdings grew its earnings per share, moving from a loss to a profit.

While it's good to see positive EPS of CN¥0.08 this year, the loss wasn't too bad last year. But from the looks of the share price gain, the market is certainly pleased the company is now profitable. Inflection points like this can be a great time to take a closer look at a company.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
SEHK:1808 Earnings Per Share Growth December 4th 2024

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Enterprise Development Holdings' earnings, revenue and cash flow.

A Different Perspective

It's good to see that Enterprise Development Holdings has rewarded shareholders with a total shareholder return of 219% in the last twelve months. That gain is better than the annual TSR over five years, which is 0.5%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For example, we've discovered 2 warning signs for Enterprise Development Holdings (1 can't be ignored!) that you should be aware of before investing here.

Enterprise Development Holdings is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

Valuation is complex, but we're here to simplify it.

Discover if Enterprise Development Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.