The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Hong Leong Capital Berhad (KLSE:HLCAP) shareholders over the last year, as the share price declined 12%. That contrasts poorly with the market decline of 1.1%. Because Hong Leong Capital Berhad hasn't been listed for many years, the market is still learning about how the business performs.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for Hong Leong Capital Berhad

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 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.

Unhappily, Hong Leong Capital Berhad had to report a 68% decline in EPS over the last year. This fall in the EPS is significantly worse than the 12% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Hong Leong Capital Berhad'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. Whereas the share price return 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 a lot higher than the share price return. As it happens, Hong Leong Capital Berhad's TSR for the last 1 year was -9.1%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While Hong Leong Capital Berhad shareholders are down 9.1% for the year (even including dividends), the market itself is up 1.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 0.3%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Hong Leong Capital Berhad better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Hong Leong Capital Berhad (including 1 which makes us a bit uncomfortable) .