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While it may not be enough for some shareholders, we think it is good to see the Hongkong Land Holdings Limited (SGX:H78) share price up 17% in a single quarter. But over the last half decade, the stock has not performed well. After all, the share price is down 26% in that time, significantly under-performing the market.
If the past week is anything to go by, investor sentiment for Hongkong Land Holdings isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
View our latest analysis for Hongkong Land Holdings
Hongkong Land Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last five years Hongkong Land Holdings saw its revenue shrink by 1.5% per year. That's not what investors generally want to see. The stock hasn't done well for shareholders in the last five years, falling 5%, annualized. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. It might be worth watching for signs of a turnaround - buyers are probably expecting one.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think Hongkong Land Holdings will earn in the future (free profit forecasts).
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. We note that for Hongkong Land Holdings the TSR over the last 5 years was -3.8%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's good to see that Hongkong Land Holdings has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That's including the dividend. Notably the five-year annualised TSR loss of 0.7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hongkong Land Holdings , and understanding them should be part of your investment process.