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Chinney Investments, Limited (HKG:216) shareholders might be concerned after seeing the share price drop 11% in the last quarter. On the bright side the returns have been quite good over the last half decade. It has returned a market beating 94% in that time. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 18% decline over the last twelve months.
View our latest analysis for Chinney Investments
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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over half a decade, Chinney Investments managed to grow its earnings per share at 25% a year. The EPS growth is more impressive than the yearly share price gain of 14% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 1.68 also suggests market apprehension.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
Dive deeper into Chinney Investments's key metrics by checking this interactive graph of Chinney Investments'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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Chinney Investments, it has a TSR of 116% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
We regret to report that Chinney Investments shareholders are down 16% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 5.3%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 17%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. You could get a better understanding of Chinney Investments's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.