Chiho Environmental Group (HKG: 976) shareholder returns have been enviable, gaining 570% in 1 year

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While stock picking is not easy, for those who wish to persevere and learn, it is possible to buy stocks of large companies and generate wonderful returns. When you find (and maintain) a big winner, you can dramatically improve your finances. For example, the Chiho Environmental Group Limited (HKG: 976) the stock price has climbed 570% towards the moon in just one year. On top of that, the stock price rose 185% in about a quarter. This could be related to recent, recently released financial results – you can keep up to date with the most recent data by reading our corporate report. When you zoom out, the stock is actually down 46% in the past three years. Anyone who has stood for this rewarding race would probably want to talk about it.

Given that the stock added HK $ 514million to its market cap in the past week alone, let’s see if the underlying performance has generated any long-term returns.

Check out our latest review for Chiho Environmental Group

In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. An imperfect but straightforward way to consider how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

Chiho Environmental Group increased its earnings per share (EPS) by 16% over the past year. We note, however, that extraordinary items had an impact on the results. This EPS growth is significantly lower than the 570% increase in the share price. It is therefore fair to assume that the market has a better opinion of the company than a year ago.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

SEHK: 976 Growth in earnings per share on September 18, 2021

This free Chiho Environmental Group’s interactive earnings, revenue and cash flow report is a great place to start if you want to delve deeper into the stock.

A different perspective

It is good to see that Chiho Environmental Group has rewarded its shareholders with a total shareholder return of 570% over the past twelve months. In particular, the loss of the annualized five-year TSR of 12% per year compares very unfavorably with the recent evolution of the share price. It makes us a little suspicious, but the company may have changed course. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. For example, we discovered 2 warning signs for Chiho Environmental Group (1 is concerning!) Which you should know before investing here.

If you are like me then you not want to miss it free list of growing companies that insiders buy.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on the Hong Kong stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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