COSCO SHIPPING International (Hong Kong)'s (HKG:517) Shareholders Are Down 41% On Their Shares

Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term COSCO SHIPPING International (Hong Kong) Co., Ltd. (HKG:517) shareholders for doubting their decision to hold, with the stock down 41% over a half decade.

See our latest analysis for COSCO SHIPPING International (Hong Kong)

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).

Looking back five years, both COSCO SHIPPING International (Hong Kong)'s share price and EPS declined; the latter at a rate of 3.4% per year. This reduction in EPS is less than the 10% annual reduction in the share price. This implies that the market was previously too optimistic about the stock. The less favorable sentiment is reflected in its current P/E ratio of 11.59.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, COSCO SHIPPING International (Hong Kong)'s TSR for the last 5 years was -22%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

COSCO SHIPPING International (Hong Kong) shareholders gained a total return of 6.5% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 4% endured over half a decade. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand COSCO SHIPPING International (Hong Kong) better, we need to consider many other factors. Even so, be aware that COSCO SHIPPING International (Hong Kong) is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

But note: COSCO SHIPPING International (Hong Kong) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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