Yahoo Finance Old Chang Kee (Catalist:5ML) shareholders have earned a 19% return over the last year
Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Old Chang Kee Ltd. (Catalist:5ML) share price is 16% higher than it was a year ago, much better than the market return of around 3.2% (not including dividends) in the same period. That's a solid performance by our standards! However, the stock hasn't done so well in the longer term, with the stock only up 0.7% in three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Old Chang Kee
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 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.
During the last year Old Chang Kee grew its earnings per share (EPS) by 57%. This EPS growth is significantly higher than the 16% increase in the share price. Therefore, it seems the market isn't as excited about Old Chang Kee as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 9.23.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Old Chang Kee's key metrics by checking this interactive graph of Old Chang Kee'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 is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Old Chang Kee, it has a TSR of 19% for the last 1 year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's good to see that Old Chang Kee has rewarded shareholders with a total shareholder return of 19% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 1.3% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Old Chang Kee better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Old Chang Kee .
If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean 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
