To justify the effort of picking individual stocks, it’s worth striving to beat returns from market index funds. But even the best stock picker can only win if: Several choice.Therefore, it is not to blame in the long run China Guangguang Environmental Group Co., Ltd. (HKG:257) shareholders have questioned their holding decisions, and the share price has fallen 58% in 50 years. Furthermore, about a quarter of them have fallen by 13%. That’s not much fun for the holder. However, this could be related to the market downturn, which fell 5.3% over the same period.
The recent 4.7% rally could be a positive sign of things to come, so let’s take a look at the historical fundamentals.
Check out our latest analysis for China Light Environment Group.
in his essay Graham & Doddsville SuperInvestors Warren Buffett has said that stock prices do not always rationally reflect the value of a company. One way he looks at how market sentiment has changed over time is to look at the interaction between a company’s share price and his earnings per share (EPS).
Over the five years that the share price fell, China Everbright Environment Group’s earnings per share (EPS) decreased by 3.1% every year. This decline in EPS is less than the 16% annual decline in the share price. So it seems like the market used to have too much confidence in this business. The less favorable sentiment is reflected in his current PER of 3.61.
The image below shows how EPS has changed over time (unveil the exact values by clicking on the image).
this free This interactive report on China Everbright Environmental Group’s earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
What will happen to the dividend?
It’s important to consider not only the share price return, but also the total shareholder return for a particular stock. Whereas the price/earnings ratio 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. So for companies that pay a generous dividend, the TSR is often much higher than the share price return. For China Guangguang Environmental Group, the TSR for the last 5 years is -42%. This exceeds the stock return mentioned earlier. This is primarily due to dividend payments.
different perspective
Investors in China Everbright Environment Group have had a tough year, with a total loss of 2.6% (including dividends), against a market gain of around 10%. Even blue-chip stocks can see their share prices drop from time to time, and we like to see improvement in a company’s fundamental metrics before we get too interested. But losses over the past year aren’t as bad as the 7% annual losses investors have suffered over the past five years. Before we can gather much enthusiasm, we need to see continued improvement in key metrics. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, consider the ever-present fear of investment risk. We’ve identified 2 warning signs for you We are affiliated with China Everbright Environment Group (at least one, but this one is a little off-putting) and understanding them should be part of your investment process.
of course, You may find a great investment if you look elsewhere. So take a look at this free A list of companies with expected revenue growth.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis of whether China Guangguang Environmental Group is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
