Reflecting on Gourmet Master's (TPE:2723) Share Price Returns Over The Last Three Years

Gourmet Master Co. Ltd. (TPE:2723) shareholders will doubtless be very grateful to see the share price up 46% in the last quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 63% in the last three years. So it is really good to see an improvement. After all, could be that the fall was overdone.

View our latest analysis for Gourmet Master

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.

Gourmet Master saw its EPS decline at a compound rate of 26% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 28% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. Rather, the share price has approximately tracked EPS growth.

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

This free interactive report on Gourmet Master's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Gourmet Master the TSR over the last 3 years was -60%, 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

Gourmet Master provided a TSR of 20% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 2% endured over half a decade. It could well be that the business is stabilizing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 1 warning sign for Gourmet Master that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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