The Sinomax Group (HKG:1418) Share Price Is Down 64% So Some Shareholders Are Wishing They Sold
If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Sinomax Group Limited (HKG:1418) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 64% drop in the share price over that period. And over the last year the share price fell 52%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 36% in the last three months.
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See our latest analysis for Sinomax Group
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Sinomax Group saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Extraordinary items contributed to this situation. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Dividend Lost
The share price return figures discussed above don't include the value of dividends paid previously, but the total shareholder return (TSR) does. Many would argue the TSR gives a more complete picture of the value a stock brings to its holders. Sinomax Group's TSR over the last 3 years is -62%; better than its share price return. Even though the company isn't paying dividends at the moment, it has done in the past.
A Different Perspective
Sinomax Group shareholders are down 51% for the year, falling short of the market return. The market shed around 14%, no doubt weighing on the stock price. The three-year loss of 28% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. You could get a better understanding of Sinomax Group's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Of course Sinomax Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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.
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. Thank you for reading.
