Investors Who Bought Ching Feng Home FashionsLtd (TPE:9935) Shares Three Years Ago Are Now Up 309%

Ching Feng Home Fashions Co.,Ltd (TPE:9935) shareholders might be concerned after seeing the share price drop 21% in the last quarter. But over the last three years the stock has shone bright like a diamond. Over that time, we've been excited to watch the share price climb an impressive 309%. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. The thing to consider is whether there is still too much elation around the company's prospects.

See our latest analysis for Ching Feng Home FashionsLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 three years of share price growth, Ching Feng Home FashionsLtd achieved compound earnings per share growth of 59% per year. This EPS growth is remarkably close to the 60% average annual increase in the share price. This observation indicates that the market's attitude to the business hasn't changed all that much. Au contraire, the share price change has arguably mimicked the EPS growth.

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

We know that Ching Feng Home FashionsLtd has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Ching Feng Home FashionsLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

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 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 Ching Feng Home FashionsLtd the TSR over the last 3 years was 312%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Ching Feng Home FashionsLtd shareholders have received a total shareholder return of 81% over one year. That's including the dividend. That's better than the annualised return of 30% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Ching Feng Home FashionsLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Ching Feng Home FashionsLtd (1 shouldn't be ignored) that you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.