Would Shareholders Who Purchased Drewloong Precision's (TPE:4572) Stock Year Be Happy With The Share price Today?

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Drewloong Precision, Inc. (TPE:4572) have tasted that bitter downside in the last year, as the share price dropped 39%. That's disappointing when you consider the market returned 23%. Drewloong Precision hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. It's up 7.0% in the last seven days.

View our latest analysis for Drewloong Precision

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Unfortunately Drewloong Precision reported an EPS drop of 77% for the last year. The share price fall of 39% isn't as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster.

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

Dive deeper into Drewloong Precision's key metrics by checking this interactive graph of Drewloong Precision's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Drewloong Precision, it has a TSR of -35% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Given that the market gained 23% in the last year, Drewloong Precision shareholders might be miffed that they lost 35% (even including dividends). While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 5.6%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Drewloong Precision better, we need to consider many other factors. For example, we've discovered 2 warning signs for Drewloong Precision that you should be aware of before investing here.

We will like Drewloong Precision better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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