Most people feel a little frustrated if a stock they own goes down in price. But sometimes broader market conditions have more of an impact on prices than the actual business performance. The National Electronics Holdings Limited (HKG:213) is down 11% over a year, but the total shareholder return is -7.4% once you include the dividend. And that total return actually beats the market return of -17%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 2.7% in three years. On the other hand the share price has bounced 5.9% over the last week. The buoyant market could have helped drive the share price pop, since stocks are up 9.0% in the same period.

Check out our latest analysis for National Electronics Holdings

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Unfortunately National Electronics Holdings reported an EPS drop of 0.1% for the last year. This reduction in EPS is not as bad as the 11% share price fall. So it seems the market was too confident about the business, a year ago. The P/E ratio of 5.09 also points to the negative market sentiment.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on National Electronics Holdings'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. 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 National Electronics Holdings, it has a TSR of -7.4% for the last year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Although it hurts that National Electronics Holdings returned a loss of 7.4% in the last twelve months, the broader market was actually worse, returning a loss of 17%. Longer term investors wouldn't be so upset, since they would have made 5.9%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. 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. To that end, you should learn about the 3 warning signs we've spotted with National Electronics Holdings (including 1 which is doesn't sit too well with us) .

But note: National Electronics Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.

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