Even though Hong Ho Precision TextileLtd (TWSE:1446) has lost NT$792m market cap in last 7 days, shareholders are still up 78% over 5 years

Hong Ho Precision Textile Co.,Ltd. (TWSE:1446) shareholders might be concerned after seeing the share price drop 10% in the last week. But at least the stock is up over the last five years. However we are not very impressed because the share price is only up 70%, less than the market return of 160%.

Since the long term performance has been good but there's been a recent pullback of 10%, let's check if the fundamentals match the share price.

Check out our latest analysis for Hong Ho Precision TextileLtd

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.

During the last half decade, Hong Ho Precision TextileLtd became profitable. That would generally be considered a positive, so we'd hope to see the share price to rise. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. Indeed, the Hong Ho Precision TextileLtd share price has gained 59% in three years. Meanwhile, EPS is up 221% per year. This EPS growth is higher than the 17% average annual increase in the share price over the same three years. 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).

Dive deeper into Hong Ho Precision TextileLtd's key metrics by checking this interactive graph of Hong Ho Precision TextileLtd'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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Hong Ho Precision TextileLtd the TSR over the last 5 years was 78%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Hong Ho Precision TextileLtd provided a TSR of 33% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 12% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Hong Ho Precision TextileLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hong Ho Precision TextileLtd , and understanding them should be part of your investment process.

We will like Hong Ho Precision TextileLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Taiwanese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com