Differ Group Holding (HKG: 6878) loses 11% this week, as annual returns are more in line with earnings growth

Differ Group Holding Company Limited (HKG: 6878) Shareholders might be rather worried as the stock price fell 39% last month. But that doesn’t compromise the rather nice long-term performance, if you measure the past three years. Indeed, the share price rose 248% during this period. After a race like this, some may not be surprised to see the prices moderate. If the business can perform well for years to come, then the recent downturn could be an opportunity.

Although Differ Group Holding lost CN 1.7 billion of its market cap this week, let’s take a look at its longer-term fundamental trends and see if they have produced any returns.

See our latest analysis for Differ Group Holding

It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but simple 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.

During three years of share price growth, Differ Group Holding achieved compound earnings per share growth of 6.8% per year. This EPS growth is lower than the average annual increase of 52% in the share price. This indicates that the market is feeling more optimistic about the stock, after the last few years of progress. It’s quite common to see investors fall in love with a company after a few years of solid progress.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

SEHK: 6,878 Growth in earnings per share September 29, 2021

We love that insiders have bought stocks in the past twelve months. With that said, most people consider earnings and revenue growth trends to be a more meaningful guide for the business. This free Differ Group Holding’s interactive profit, revenue and cash flow report is a great place to start if you want to dig deeper into the stock market.

A different perspective

We are pleased to report that the shareholders of Differ Group Holding received a total shareholder return of 168% over one year. This includes the dividend. This gain is better than the annual TSR over five years, which is 25%. Therefore, it seems that sentiment around the company has been positive lately. At the best of times, this can portend real business momentum, meaning that now may be a good time to dig deep. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Differ Group Holding, there are many other factors that we need to take into account. Example: we have spotted 3 warning signs for Differ Group Holding you need to be aware of it, and one of them is potentially serious.

Differ Group Holding is not the only one to buy. So take a look at this free list of growing companies with insider buying.

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.

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 material. Simply Wall St has no position in any of the stocks mentioned.

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