Despite delivering investors losses of 23% over the past 5 years, China Traditional Chinese Medicine Holdings (HKG:570) has been growing its earnings

this week we saw China Traditional Herbal Medicine Holding Co., Ltd. (HKG: 570) shares rose 11%. But the stock has performed poorly over the past five years. In fact, the stock is down 30% for him, well below the return you’d get from buying an index fund.

Shareholders have felt more comfortable over the past week, but the past five years have been still in the red. So let’s see if core business is responsible for the decline.

check out opportunities and risks Within the HK Pharmaceuticals industry.

To quote Buffett, “Ships sail the world, but the Flat Earth Society thrives. There will continue to be a great discrepancy between price and value in the market…” Over time. One way to see how market sentiment has changed is to look at the interaction between a company’s stock price and earnings per share (EPS).

During an unfortunate six-month period when stock prices fell, Traditional Chinese Medicine Holdings actually improved earnings per share (EPS) by 3.0% annually. So EPS doesn’t seem like a good guide for understanding how the market values ​​stocks. Alternatively, the market may have been so optimistic previously that the stock disappoints despite improved EPS.

Looking at these numbers, we can infer that the market expected much higher growth than it did five years ago. Looking at other metrics might better explain the change in stock prices.

In contrast to the stock price, earnings have actually grown 17% annually over five years. So it seems we need to take a closer look at the fundamentals to understand why stocks are sluggish. After all, you may have a chance.

The chart below shows how revenue and returns have changed over time (click the image to see the exact values).

Balance sheet strength is very important.Might be worth taking a look at us freedom Report on how your financial situation has changed over time.

What about Total Shareholder Return (TSR)?

Not to mention the difference between Traditional Chinese Medicine Holdings. Total shareholder return (TSR) and its stock price returnTSR is arguably a more complete return calculation because it considers the value of dividends (as if they were reinvested) along with the hypothetical value of discounted capital provided to shareholders. TSR of China Traditional Chinese Medicine Holdings, in five years he lost 23%. It paid a dividend, so it wasn’t as bad as the stock return.

another point of view

It’s disappointing that China Traditional Chinese Medicine Holdings has lost 17% in the last 12 months, but the broader market actually did worse, returning a loss of 29%. Considering a total loss of 4% per annum over five years, it looks like earnings have deteriorated over the past 12 months. Some investors specialize in buying struggling (and still undervalued) companies, but remember Buffett said that “they seldom turn around.” Most investors take the time to check insider trading data.You can do it Click here to see if insiders are buying or selling.

If you like buying stocks with management, you might like this one freedom company list. (Hint: Insiders are buying).

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the Hong Kong exchange.

Do you have feedback on this article? What interests you? contact directly with us. Or send an email to our editorial team (at) Simplywallst.com.

This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or qualitative materials. Is not …