Investors five-year losses continue as Tiong Nam Logistics Holdings Berhad (KLSE:TNLOGIS) dips a further 11% this week, earnings continue to decline

Published
July 18, 2022
KLSE:TNLOGIS
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Statistically speaking, long term investing is a profitable endeavour. But along the way some stocks are going to perform badly. To wit, the Tiong Nam Logistics Holdings Berhad (KLSE:TNLOGIS) share price managed to fall 69% over five long years. That's not a lot of fun for true believers. We also note that the stock has performed poorly over the last year, with the share price down 35%. Furthermore, it's down 25% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 11% in the same period.

After losing 11% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Tiong Nam Logistics Holdings Berhad

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).

Tiong Nam Logistics Holdings Berhad became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

The modest 1.9% dividend yield is unlikely to be guiding the market view of the stock. In contrast to the share price, revenue has actually increased by 1.2% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
KLSE:TNLOGIS Earnings and Revenue Growth July 18th 2022

It is of course excellent to see how Tiong Nam Logistics Holdings Berhad has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Tiong Nam Logistics Holdings Berhad stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Tiong Nam Logistics Holdings Berhad shareholders are down 34% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 5.9%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% 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. For instance, we've identified 3 warning signs for Tiong Nam Logistics Holdings Berhad (1 shouldn't be ignored) that you should be aware of.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Tiong Nam Logistics Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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