The profit growth of 271% over 1 year was not enough to translate into positive returns for the shareholders of Bonny International Holding (HKG: 1906)
The easiest way to profit from a bull market is to buy an index fund. But if you buy individual stocks, you can do better or worse than that. Investors in Bonny International Holding Limited (HKG: 1906) have tasted this bitter drop over the past year, as the stock price has fallen 11%. This contrasts poorly with the market return of 9.0%. Since Bonny International Holding has not been listed on the stock exchange for many years, the market is still learning more about the performance of the company. Last month was also disappointing, with the stock falling a further 14%. Importantly, it could be a market reaction to the recently released financial results. You can see the latest figures in our corporate report.
After losing 11% last week, it’s worth studying the fundamentals of the business to see what we can infer from past performance.
See our latest analysis for Bonny International Holding
To quote Buffett, “Ships will sail around the world but the Flat Earth Society will thrive. There will continue to be wide spreads between price and value in the market … ‘One way to look at how market sentiment has changed over time is to look at the interaction between price. a company’s stock and earnings per share (EPS).
Even though Bonny International Holding’s share price fell over the year, its EPS actually improved. Of course, the situation could betray the previous excess optimism about growth.
It’s fair to say that the stock price doesn’t seem to reflect the growth in BPA. It is therefore easy to justify a look at other measures.
On the other hand, the 15% drop in turnover is a real concern. Many investors see falling earnings as a likely precursor to falling earnings, which may well explain the weakness in the stock price.
The graph below illustrates the evolution of earnings and income over time (reveal the exact values by clicking on the image).
If you are planning to buy or sell shares of Bonny International Holding, you should check this out FREE detailed report on its balance sheet.
A different perspective
Given that the market has gained 9.0% in the past year, shareholders of Bonny International Holding might be upset that they lost 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 5.3% in the past three months, the market doesn’t seem to believe the company has solved all of its problems. Given the relatively short history of this stock, we would remain fairly cautious until we see strong trading performance. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really understand better, we have to take other information into account as well. For example, we have identified 3 warning signs for Bonny International Holding that you need to be aware of.
We will like Bonny International Holding better if we see large insider buys. In the meantime, watch this free list of growing companies with significant and recent 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.
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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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