What Type Of Returns Would Keck Seng (Malaysia) Berhad's(KLSE:KSENG) Shareholders Have Earned If They Purchased Their SharesFive Years Ago?

For many, the main point of investing is to generate higher returns than the overall market. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term Keck Seng (Malaysia) Berhad (KLSE:KSENG) shareholders for doubting their decision to hold, with the stock down 31% over a half decade.

View our latest analysis for Keck Seng (Malaysia) Berhad

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 Keck Seng (Malaysia) Berhad's share price and EPS declined; the latter at a rate of 59% per year. The impact of extraordinary items helps explain this. This fall in the EPS is worse than the 7% compound annual share price fall. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline. With a P/E ratio of 462.54, it's fair to say the market sees a brighter future for the business.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

This free interactive report on Keck Seng (Malaysia) Berhad's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered Keck Seng (Malaysia) Berhad's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Keck Seng (Malaysia) Berhad's TSR, which was a 25% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

Keck Seng (Malaysia) Berhad shareholders are down 18% for the year, but the market itself is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality 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. To that end, you should learn about the 3 warning signs we've spotted with Keck Seng (Malaysia) Berhad (including 1 which doesn't sit too well with us) .

But note: Keck Seng (Malaysia) Berhad 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 MY 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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