The main aim of stock picking is to find the market-beating stocks. But even the best stock picker will only win with some selections. At this point some shareholders may be questioning their investment in Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318), since the last five years saw the share price fall 50%.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 five years over which the share price declined, Ping An Insurance (Group) Company of China's earnings per share (EPS) dropped by 8.2% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 13% per year, over the period. This implies that the market was previously too optimistic about the stock. The less favorable sentiment is reflected in its current P/E ratio of 9.16.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
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. It might be well worthwhile taking a look at our free report on Ping An Insurance (Group) Company of China's earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Ping An Insurance (Group) Company of China, it has a TSR of -38% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
While it's certainly disappointing to see that Ping An Insurance (Group) Company of China shares lost 14% throughout the year, that wasn't as bad as the market loss of 18%. Given the total loss of 7% per year over five years, it seems returns have deteriorated in the last twelve months. While some investors do well specializing in buying companies that are struggling (but nonetheless undervalued), don't forget that Buffett said that 'turnarounds seldom turn'. It's always interesting to track share price performance over the longer term. But to understand Ping An Insurance (Group) Company of China better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Ping An Insurance (Group) Company of China , and understanding them should be part of your investment process.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
株式選択の主な目的は市場を上回る株式を見つけることですが、最高の株式選択人でもいくつかの選択でしか勝てません。この時点で、Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318)の株主の中には、過去5年間に株価が50%下落したことに対して投資に疑問を持っている人もいるかもしれません。
株価が下落した5年間にわたり、Ping An Insurance (Group) Company of Chinaの1株あたり利益(EPS)は年間8.2%減少しました。株価は、期間中に年率13%の速度でEPSよりも速く下落していることに読者は注意すべきです。これは市場が以前はこの株について楽観的すぎたことを意味します。不利なセンチメントは現在のP/E比率で反映されています。現在のP/E比率は9.16です。
社内者が昨年大量の購入を行ったことは肯定的だと考えています。しかし、ほとんどの人々は、収益や売上高の成長傾向がビジネスのより意味のあるガイドであると考えています。Ping An Insurance (Group) Company of Chinaの収益、売上高、キャッシュフローに関する無料レポートを参照することをお勧めします。
どの株も、株価リターンだけでなく、総株主リターンも考慮することが重要です。株価リターンは株価の変化のみを反映しますが、TSRには配当(再投資されたと仮定)、割引された資本調達またはスピンオフの恩恵が含まれます。配当を支払う株については、TSRがより完全なイメージを与えることができると言えます。Ping An Insurance (Group) Company of Chinaについては、過去5年間のTSRが-38%になっています。これは以前に述べた株価リターンを上回るものです。これは主に配当支払いの結果です。
Ping An Insurance (Group) Company of Chinaの株式が年間14%下落したことは確かに失望ですが、市場の18%の損失よりはマシでした。過去5年間で年間7%の総損失があり、直近12か月でリターンが悪化したようです。企業再建中の会社を買うことに特化した投資家もいますが(価値が低くても)、Buffettは「再建はめったに成功しない」と述べていることを忘れないでください。長期にわたる株価パフォーマンスを追跡するのは常に興味深いことですが、Ping An Insurance (Group) Company of Chinaをより理解するには、多くの他の要因を考慮する必要があります。投資リスクの悪夢も考慮することが重要です。Ping An Insurance (Group) Company of Chinaで1つの警告サインを特定しました。それらを理解することはあなたの投資プロセスの一部であるべきです。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。