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The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Hope Education Group Co., Ltd. (HKG:1765) share price is 65% higher than it was a year ago, much better than the market return of around -3.6% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Hope Education Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
View our latest analysis for Hope Education Group
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. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last year Hope Education Group grew its earnings per share (EPS) by 1.1%. The share price gain of 65% certainly outpaced the EPS growth. So it's fair to assume the market has a higher opinion of the business than it a year ago.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
This free interactive report on Hope Education Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Hope Education Group the TSR over the last year was 67%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Hope Education Group boasts a total shareholder return of 67% for the last year (that includes the dividends) . A substantial portion of that gain has come in the last three months, with the stock up 25% in that time. This suggests the company is continuing to win over new investors. 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 risks, for instance. Every company has them, and we've spotted 2 warning signs for Hope Education Group you should know about.