Did You Miss Tai Sin Electric's (SGX:500) 20% Share Price Gain?

We believe investing is smart because history shows that stock markets go higher in the long term. But not every stock you buy will perform as well as the overall market. For example, the Tai Sin Electric Limited (SGX:500), share price is up over the last year, but its gain of 20% trails the market return. In contrast, the longer term returns are negative, since the share price is 15% lower than it was three years ago.

View our latest analysis for Tai Sin Electric

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

During the last year Tai Sin Electric grew its earnings per share (EPS) by 24%. It's fair to say that the share price gain of 20% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Tai Sin Electric as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.81.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Tai Sin Electric, it has a TSR of 25% for the last year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Tai Sin Electric provided a TSR of 25% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 7% over half a decade It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Tai Sin Electric better, we need to consider many other factors. For example, we've discovered 3 warning signs for Tai Sin Electric (1 is a bit unpleasant!) that you should be aware of before investing here.

Tai Sin Electric is not the only stock that insiders are buying. 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 SG 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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