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It hasn't been the best quarter for Shirble Department Store Holdings (China) Limited (HKG:312) shareholders, since the share price has fallen 19% in that time. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 137% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Ultimately business performance will determine whether the stock price continues the positive long term trend.
Check out our latest analysis for Shirble Department Store Holdings (China)
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 last half decade, Shirble Department Store Holdings (China) became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the Shirble Department Store Holdings (China) share price has gained 116% in three years. In the same period, EPS is up 19% per year. This EPS growth is lower than the 29% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It might be well worthwhile taking a look at our free report on Shirble Department Store Holdings (China)'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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Shirble Department Store Holdings (China), it has a TSR of 153% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!