Emperor Capital Group (HKG:717) delivers shareholders splendid 200% return over 1 year, surging 10% in the last week alone
Emperor Capital Group (HKG:717) has delivered a remarkable 200% return to shareholders over the past year, with a 10% surge in the last week alone. The company's earnings per share improved from a loss to a profit, indicating strong growth. Despite a previous five-year TSR loss of 4% per year, recent performance suggests a turnaround. However, potential investors should consider other factors, including a warning sign identified with the company.
When you buy shares in a company, there is always a risk that the price drops to zero. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Emperor Capital Group Limited (HKG:717) share price has soared 200% return in just a single year. And in the last month, the share price has gained 20%. Also impressive, the stock is up 93% over three years, making long term shareholders happy, too.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
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While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 Emperor Capital Group grew its earnings per share, moving from a loss to a profit.
The result looks like a strong improvement to us, so we're not surprised the market likes the growth. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
A Different Perspective
It's nice to see that Emperor Capital Group shareholders have received a total shareholder return of 200% over the last year. There's no doubt those recent returns are much better than the TSR loss of 4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Emperor Capital Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Emperor Capital Group .
But note: Emperor Capital Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
