Haitong International Securities Group (HKG: 665) share price has fallen 53% in past five years

The main goal of stock picking is to find stocks that are beating the market. But in any portfolio, there will be mixed results between individual stocks. So we wouldn’t blame in the long run Haitong International Securities Group Limited (HKG: 665) for doubting their decision to keep, the stock having fallen 53% in half a decade. Plus, it’s down 14% in about a quarter. It’s not a lot of fun for the holders.

See our latest analysis for Haitong International Securities Group

To quote Buffett, “Ships will sail around the world but the Flat Earth Society will thrive. There will continue to be wide spreads between price and value in the market … ‘One way to look at how market sentiment has changed over time is to look at the interaction between price. a company’s stock and earnings per share (EPS).

As the share price fell over five years, Haitong International Securities Group managed to increase Average EPS of 4.0% per year. So it doesn’t seem like EPS is a great guide to understanding how the market is valuing the stock. Alternatively, growth expectations may have been unreasonable in the past.

Based on these numbers, we venture to believe that the market may have been overly optimistic about growth forecasts half a decade ago. That said, we might get a better idea of ​​what’s going on with the stock by looking at other metrics.

The most recent dividend was actually lower than it was in the past, which may have pushed the stock price down.

The image below shows how revenue and income have tracked over time (if you click on the image you can see more details).

We know Haitong International Securities Group has improved its results lately, but what does the future hold? You can see what analysts are predicting for Haitong International Securities Group in this interactive graph of future profit estimates.

What about dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. While the share price return reflects only the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital increase or spin- off updated. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. In the case of Haitong International Securities Group, it has a TSR of -39% for the past 5 years. This exceeds the return on its share price that we mentioned earlier. The dividends paid by the company thus boosted the total shareholder return.

A different perspective

Haitong International Securities Group shareholders are down 1.4% on the year (including dividends), but the market itself is up 16%. Even good stock prices sometimes drop, but we want to see improvements in the fundamentals of a company, before we get too interested. However, the loss over the past year is not as bad as the 7% per year loss that investors have suffered over the past five years. We would like clear information suggesting that the company will grow, before considering that the share price will stabilize. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for example. Every business has them, and we’ve spotted 3 warning signs for Haitong International Securities Group (1 of which doesn’t suit us very well!) you should know that.

If you are like me then you do not want to miss it free list of growing companies that insiders buy.

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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