This week we saw the Excellence Commercial Property & Facilities Management Group Limited (HKG: 6989) the share price climbs 16%. But that doesn’t change the fact that the returns over the past year have been less than pleasant. In fact, the price has fallen 42% in one year, below the returns you could get by investing in an index fund.
On a more encouraging note, the company added CNN 879 million to its market cap over the past 7 days, so let’s see if we can determine what caused the loss of a year for shareholders.
See our latest analysis for Excellence Commercial Property & Facilities Management Group
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are overly responsive dynamic systems and investors are not always rational. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
In the unfortunate twelve months in which the Excellence Commercial Property & Facilities Management Group share price fell, it has indeed seen its earnings per share (EPS) improve by 42%. The share price may have been over-exaggerated before.
The divergence between EPS and share price is quite noticeable during the year. It is therefore easy to justify a look at other measures.
Excellence Commercial Property & Facilities Management Group has managed to increase its turnover over the past year which is generally very positive. Since fundamental metrics do not easily explain the decline in stock prices, there could be an opportunity if the market has overreacted.
The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).
We consider it positive that insiders have made significant purchases in the past year. Even so, future profits will be much more important to whether current shareholders make money. So we recommend you to check this free report showing consensus forecasts
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 incorporates the value of any discounted demerger or capital increase, as well as any dividend, based on the assumption that dividends are reinvested. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. We note that for Excellence Commercial Property & Facilities Management Group the TSR over the past year was -40% which is better than the share price return mentioned above. This is largely the result of his dividend payments!
A different perspective
The shareholders of Excellence Commercial Property & Facilities Management Group are down 40% year-on-year (including dividends), even worse than the market loss of 0.3%. No doubt it’s a bummer, but the stock just might have held up better in a stronger market. The stock price has continued to decline over the past three months, down 12%, suggesting a lack of investor enthusiasm. Given the relatively short history of this stock, we will remain fairly cautious until we see strong trading performance. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Excellence Commercial Property & Facilities Management Group, there are many other factors that we need to consider. However, be aware that Excellence Commercial Property & Facilities Management Group shows 2 warning signs in our investment analysis , you must know…
Excellence Commercial Property & Facilities Management Group isn’t the only stock that insiders buy. For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on the Hong Kong stock exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.