Should Winson Holdings Hong Kong (HKG:8421) Be Disappointed With Their 52% Profit?

Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Winson Holdings Hong Kong Limited (HKG:8421) share price is 52% higher than it was a year ago, much better than the market return of around 4.5% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Winson Holdings Hong Kong hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Winson Holdings Hong Kong

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 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).

Winson Holdings Hong Kong was able to grow EPS by 9.1% in the last twelve months. This EPS growth is significantly lower than the 52% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.

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

Dive deeper into Winson Holdings Hong Kong's key metrics by checking this interactive graph of Winson Holdings Hong Kong's earnings, revenue and cash flow.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Winson Holdings Hong Kong the TSR over the last year was 57%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Winson Holdings Hong Kong shareholders have gained 57% over the last year , including dividends . A substantial portion of that gain has come in the last three months, with the stock up 26% in that time. This suggests the company is continuing to win over new investors. 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. Case in point: We've spotted 2 warning signs for Winson Holdings Hong Kong you should be aware of.

We will like Winson Holdings Hong Kong better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.