Reflecting on Y.C.C. Parts Mfg's (TPE:1339) Share Price Returns Over The Last Year

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Y.C.C. Parts Mfg. Co., Ltd. (TPE:1339) have tasted that bitter downside in the last year, as the share price dropped 24%. That contrasts poorly with the market return of 34%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 3.4% in three years. And the share price decline continued over the last week, dropping some 6.5%.

See our latest analysis for Y.C.C. Parts Mfg

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Unfortunately Y.C.C. Parts Mfg reported an EPS drop of 69% for the last year. The share price fall of 24% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

It might be well worthwhile taking a look at our free report on Y.C.C. Parts Mfg's earnings, revenue and cash flow.

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. We note that for Y.C.C. Parts Mfg the TSR over the last year was -21%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Investors in Y.C.C. Parts Mfg had a tough year, with a total loss of 21% (including dividends), against a market gain of about 34%. 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 0.8% 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. It's always interesting to track share price performance over the longer term. But to understand Y.C.C. Parts Mfg better, we need to consider many other factors. For instance, we've identified 4 warning signs for Y.C.C. Parts Mfg (1 is a bit unpleasant) that you should be aware of.

Of course Y.C.C. Parts Mfg may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on TW 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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