If You Had Bought Asia Pacific Satellite's (KOSDAQ:211270) Shares Three Years Ago You Would Be Down 12%

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term Asia Pacific Satellite Inc. (KOSDAQ:211270) shareholders have had that experience, with the share price dropping 12% in three years, versus a market return of about 23%. But it's up 5.6% in the last week.

See our latest analysis for Asia Pacific Satellite

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Asia Pacific Satellite saw its EPS decline at a compound rate of 31% per year, over the last three years. The recent extraordinary items made their mark on profits. In comparison the 4% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines. This positive sentiment is also reflected in the generous P/E ratio of 57.19.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Asia Pacific Satellite has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Asia Pacific Satellite will grow revenue in the future.

A Different Perspective

Asia Pacific Satellite shareholders are up 11% for the year. While you don't go broke making a profit, this return was actually lower than the average market return of about 32%. The silver lining is that the recent rise is far preferable to the annual loss of 4% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Asia Pacific Satellite (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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 KR 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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