It’s easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Y.S.P. Southeast Asia Holding Berhad (KLSE:YSPSAH) have tasted that bitter downside in the last year, as the share price dropped 14%. That’s disappointing when you consider the market returned 4.1%. At least the damage isn’t so bad if you look at the last three years, since the stock is down 8.2% in that time.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they’ve been consistent with returns.
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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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.
Unfortunately Y.S.P. Southeast Asia Holding Berhad reported an EPS drop of 31% for the last year. This fall in the EPS is significantly worse than the 14% the share price fall. So the market may not be too worried about the EPS figure, at the moment — or it may have expected earnings to drop faster.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Y.S.P. Southeast Asia Holding Berhad’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Y.S.P. Southeast Asia Holding Berhad the TSR over the last 1 year was -9.5%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.