The Xin Yuan Enterprises Group (HKG:1748) Share Price Has Gained 15% And Shareholders Are Hoping For More

While Xin Yuan Enterprises Group Limited (HKG:1748) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 14% in the last quarter. Taking a longer term view we see the stock is up over one year. But to be blunt its return of 15% fall short of what you could have got from an index fund (around 46%).

See our latest analysis for Xin Yuan Enterprises Group

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 Xin Yuan Enterprises Group grew its earnings per share (EPS) by 43%. This EPS growth is significantly higher than the 15% increase in the share price. So it seems like the market has cooled on Xin Yuan Enterprises Group, despite the growth. Interesting. This cautious sentiment is reflected in its (fairly low) P/E ratio of 9.96.

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

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Xin Yuan Enterprises Group's earnings, revenue and cash flow.

A Different Perspective

We're happy to report that Xin Yuan Enterprises Group are up 15% over the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 46%. The stock trailed the market by 25% in that time, testament to the power of passive investing. But a weak quarter certainly doesn't diminish the longer-term achievements of the business. 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 3 warning signs for Xin Yuan Enterprises Group you should be aware of, and 1 of them can't be ignored.

Xin Yuan Enterprises Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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