Explore New Hoong Fatt Holdings Berhad’s Fair Values from the Community and select yours
Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. Buying under-rated businesses is one path to excess returns. To wit, the New Hoong Fatt Holdings Berhad share price has climbed 90% in five years, easily topping the market return of 2.8% (ignoring dividends). However, more recent returns haven’t been as impressive as that, with the stock returning just 8.5% in the last year, including dividends.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
We’ve found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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.
Over half a decade, New Hoong Fatt Holdings Berhad managed to grow its earnings per share at 32% a year. This EPS growth is higher than the 14% average annual increase in the share price. So it seems the market isn’t so enthusiastic about the stock these days. The reasonably low P/E ratio of 8.28 also suggests market apprehension.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
This free interactive report on New Hoong Fatt Holdings Berhad’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of New Hoong Fatt Holdings Berhad, it has a TSR of 135% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
It’s nice to see that New Hoong Fatt Holdings Berhad shareholders have received a total shareholder return of 8.5% over the last year. And that does include the dividend. However, that falls short of the 19% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they’ve missed the opportunity, but it’s always possible business is still firing on all cylinders. It’s always interesting to track share price performance over the longer term. But to understand New Hoong Fatt Holdings Berhad better, we need to consider many other factors. Take risks, for example – New Hoong Fatt Holdings Berhad has 2 warning signs we think you should be aware of.