We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. To wit, the Hung Fook Tong Group Holdings Limited (HKG:1446) share price managed to fall 53% over five long years. That is extremely sub-optimal, to say the least. And it's not just long term holders hurting, because the stock is down 28% in the last year. Unhappily, the share price slid 3.9% in the last week.

See our latest analysis for Hung Fook Tong Group 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 five years over which the share price declined, Hung Fook Tong Group Holdings's earnings per share (EPS) dropped by 16% each year. This change in EPS is reasonably close to the 14% average annual decrease in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price change has reflected changes in earnings per share.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Hung Fook Tong Group Holdings's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Hung Fook Tong Group Holdings the TSR over the last 5 years was -51%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We regret to report that Hung Fook Tong Group Holdings shareholders are down 27% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 8.5%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Hung Fook Tong Group Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for Hung Fook Tong Group Holdings that you should be aware of.