Shareholders Of Sheh Fung Screws (GTSM:2065) Must Be Happy With Their 145% Total Return

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. For instance the Sheh Fung Screws Co., Ltd. (GTSM:2065) share price is 103% higher than it was three years ago. How nice for those who held the stock!

See our latest analysis for Sheh Fung Screws

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Sheh Fung Screws was able to grow its EPS at 33% per year over three years, sending the share price higher. The average annual share price increase of 27% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Sheh Fung Screws' 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)?

Investors should note that there's a difference between Sheh Fung Screws' total shareholder return (TSR) and its share price change, which we've covered above. 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. Sheh Fung Screws' TSR of 145% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Sheh Fung Screws produced a TSR of 26% over the last year. It's always nice to make money but this return falls short of the market return which was about 36% for the year. At least the longer term returns (running at about 35% a year, are better. Even the best companies don't see strong share price performance every year. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Sheh Fung Screws you should be aware of, and 1 of them shouldn't be ignored.

Of course Sheh Fung Screws 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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