If You Had Bought Hai-O Enterprise Berhad's (KLSE:HAIO) Shares Three Years Ago You Would Be Down 60%

While not a mind-blowing move, it is good to see that the Hai-O Enterprise Berhad (KLSE:HAIO) share price has gained 16% in the last three months. But over the last three years we've seen a quite serious decline. Regrettably, the share price slid 60% in that period. Some might say the recent bounce is to be expected after such a bad drop. After all, could be that the fall was overdone.

See our latest analysis for Hai-O Enterprise Berhad

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the three years that the share price fell, Hai-O Enterprise Berhad's earnings per share (EPS) dropped by 20% each year. The share price decline of 26% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

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

Dive deeper into Hai-O Enterprise Berhad's key metrics by checking this interactive graph of Hai-O Enterprise Berhad's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Hai-O Enterprise Berhad's TSR for the last 3 years was -53%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Hai-O Enterprise Berhad shareholders gained a total return of 1.7% during the year. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 11% per year for five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. 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 1 warning sign with Hai-O Enterprise Berhad , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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