Stock Analysis

Investors Who Bought Sonix TechnologyLtd (TPE:5471) Shares A Year Ago Are Now Up 105%

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TWSE:5471
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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Sonix Technology Co.,Ltd. (TPE:5471) share price has soared 105% return in just a single year. Also pleasing for shareholders was the 23% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. And shareholders have also done well over the long term, with an increase of 76% in the last three years.

Check out our latest analysis for Sonix TechnologyLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

During the last year Sonix TechnologyLtd grew its earnings per share (EPS) by 167%. It's fair to say that the share price gain of 105% did not keep pace with the EPS growth. So it seems like the market has cooled on Sonix TechnologyLtd, despite the growth. Interesting.

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

earnings-per-share-growth
TSEC:5471 Earnings Per Share Growth November 27th 2020

We know that Sonix TechnologyLtd has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Sonix TechnologyLtd's TSR for the last year was 112%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that Sonix TechnologyLtd shareholders have received a total shareholder return of 112% over one year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 20% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Sonix TechnologyLtd .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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About TWSE:5471

Sonix TechnologyLtd

Sonix Technology Co.,Ltd. develops, designs, manufactures, and trades in semiconductors in Taiwan and internationally.

Flawless balance sheet and good value.

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