Investors in Shin Foong Specialty and Applied Materials (TWSE:6582) from three years ago are still down 72%, even after 14% gain this past week

While it may not be enough for some shareholders, we think it is good to see the Shin Foong Specialty and Applied Materials Co., Ltd. (TWSE:6582) share price up 29% in a single quarter. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 78% in the last three years. So it sure is nice to see a bit of an improvement. Of course the real question is whether the business can sustain a turnaround.

The recent uptick of 14% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Shin Foong Specialty and Applied Materials

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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Shin Foong Specialty and Applied Materials saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Shin Foong Specialty and Applied Materials the TSR over the last 3 years was -72%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Shin Foong Specialty and Applied Materials provided a TSR of 9.3% over the last twelve months. But that return falls short of the market. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 10% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Shin Foong Specialty and Applied Materials better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shin Foong Specialty and Applied Materials you should be aware of.

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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