Weikeng Industrial (TPE:3033) Shareholders Booked A 13% Gain In The Last Year

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But if you choose that path, you're going to buy some stocks that fall short of the market. For example, the Weikeng Industrial Co., Ltd. (TPE:3033), share price is up over the last year, but its gain of 13% trails the market return. However, the longer term returns haven't been so impressive, with the stock up just 3.2% in the last three years.

Check out our latest analysis for Weikeng Industrial

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

Weikeng Industrial was able to grow EPS by 91% in the last twelve months. This EPS growth is significantly higher than the 13% increase in the share price. Therefore, it seems the market isn't as excited about Weikeng Industrial as it was before. This could be an opportunity.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Weikeng Industrial's key metrics by checking this interactive graph of Weikeng Industrial's earnings, revenue and cash flow.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Weikeng Industrial the TSR over the last year was 17%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Weikeng Industrial shareholders are up 17% for the year (even including dividends). But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 8% per year over five year. 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 Weikeng Industrial better, we need to consider many other factors. For instance, we've identified 2 warning signs for Weikeng Industrial 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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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. 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.
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