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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Regal International Airport Group Company Limited (HKG:357) shareholders over the last year, as the share price declined 40%. That falls noticeably short of the market return of around -13%. Notably, shareholders had a tough run over the longer term, too, with a drop of 33% in the last three years. Furthermore, it's down 15% in about a quarter. That's not much fun for holders. However, one could argue that the price has been influenced by the general market, which is down 7.8% in the same timeframe.
View our latest analysis for Regal International Airport Group
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.
Even though the Regal International Airport Group share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth. The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
Regal International Airport Group's revenue is actually up 16% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We know that Regal International Airport Group has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Regal International Airport Group
A Dividend Lost
It's important to keep in mind that we've been talking about the share price returns, which don't include dividends, while the total shareholder return does. By accounting for the value of dividends paid, the TSR can be seen as a more complete measure of the value a company brings to its shareholders. Over the last year, Regal International Airport Group generated a TSR of -38%, which is, of course, better than the share price return. Even though the company isn't paying dividends at the moment, it has done in the past.