Annuncio pubblicitario
Italia markets closed
  • FTSE MIB

    34.750,35
    -9,34 (-0,03%)
     
  • Dow Jones

    39.807,37
    +47,29 (+0,12%)
     
  • Nasdaq

    16.379,46
    -20,06 (-0,12%)
     
  • Nikkei 225

    40.369,44
    +201,37 (+0,50%)
     
  • Petrolio

    83,11
    -0,06 (-0,07%)
     
  • Bitcoin EUR

    64.889,52
    -338,39 (-0,52%)
     
  • CMC Crypto 200

    885,54
    0,00 (0,00%)
     
  • Oro

    2.254,80
    +16,40 (+0,73%)
     
  • EUR/USD

    1,0800
    +0,0007 (+0,06%)
     
  • S&P 500

    5.254,35
    +5,86 (+0,11%)
     
  • HANG SENG

    16.541,42
    +148,58 (+0,91%)
     
  • Euro Stoxx 50

    5.083,42
    +1,68 (+0,03%)
     
  • EUR/GBP

    0,8547
    +0,0000 (+0,00%)
     
  • EUR/CHF

    0,9729
    +0,0002 (+0,02%)
     
  • EUR/CAD

    1,4616
    +0,0010 (+0,07%)
     

Easy Come, Easy Go: How Alltronics Holdings (HKG:833) Shareholders Got Unlucky And Saw 80% Of Their Cash Evaporate

Over the last month the Alltronics Holdings Limited (HKG:833) has been much stronger than before, rebounding by 96%. But that doesn't change the fact that the returns over the last three years have been stomach churning. The share price has sunk like a leaky ship, down 80% in that time. So it's about time shareholders saw some gains. But the more important question is whether the underlying business can justify a higher price still.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

Check out our latest analysis for Alltronics Holdings

ANNUNCIO PUBBLICITARIO

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Alltronics Holdings 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. Due to the loss, it's not easy to use EPS as a reliable guide to the business. 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).

SEHK:833 Past and Future Earnings May 26th 2020
SEHK:833 Past and Future Earnings May 26th 2020

Dive deeper into Alltronics Holdings's key metrics by checking this interactive graph of Alltronics Holdings's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Alltronics Holdings's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Alltronics Holdings's TSR of was a loss of 79% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

While the broader market lost about 8.2% in the twelve months, Alltronics Holdings shareholders did even worse, losing 21%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Alltronics Holdings (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.