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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by UTS Marketing Solutions Holdings Limited (HKG:6113) shareholders over the last year, as the share price declined 18%. That contrasts poorly with the market return of -5.3%. UTS Marketing Solutions Holdings may have better days ahead, of course; we've only looked at a one year period. It's up 4.6% in the last seven days.
View our latest analysis for UTS Marketing Solutions Holdings
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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the UTS Marketing Solutions Holdings share price fell, it actually saw its earnings per share (EPS) improve by 34%. It could be that the share price was previously over-hyped. It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.
UTS Marketing Solutions Holdings's dividend seems healthy to us, so we doubt that the yield is a concern for the market. We'd be more worried about the fact that revenue fell 13% year on year. The market may be extrapolating the decline, leading to questions around the sustainability of the EPS.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, UTS Marketing Solutions Holdings's TSR for the last year was -9.5%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.