Stock Analysis

Would Shareholders Who Purchased China Southern Airlines' (HKG:1055) Stock Three Years Be Happy With The Share price Today?

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SEHK:1055
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China Southern Airlines Company Limited (HKG:1055) shareholders should be happy to see the share price up 17% in the last month. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 47% in the last three years, falling well short of the market return.

See our latest analysis for China Southern Airlines

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

China Southern Airlines saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

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:1055 Earnings Per Share Growth February 17th 2021

This free interactive report on China Southern Airlines' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

China Southern Airlines provided a TSR of 9.1% over the last twelve months. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 3% over half a decade This suggests the company might be improving over time. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China Southern Airlines , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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