Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the PAX Global Technology share price has climbed 64% in five years, easily topping the market decline of 28% (ignoring dividends).
While the stock has fallen 6.3% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
See our latest analysis for PAX Global Technology
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over half a decade, PAX Global Technology managed to grow its earnings per share at 26% a year. The EPS growth is more impressive than the yearly share price gain of 10% over the same period. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 4.81 also suggests market apprehension.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. As it happens, PAX Global Technology's TSR for the last 5 years was 102%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We regret to report that PAX Global Technology shareholders are down 22% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 18%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 15%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand PAX Global Technology better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for PAX Global Technology you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
株式の選定者は、一般的に株式市場全体を上回るパフォーマンスを示す株式を探しています。そして、正しい株式を購入することは、あなたの富に重要なブーストを与えることができます。例えば、PAX Global Technologyの株価は5年間で64%上昇し、配当を除けば28%の市場の下落を軽易に上回りました。
半年間で、PAX Global Technologyは一株あたりの利益を年率26%成長させることができました。EPSの成長は、同じ期間に年率10%増加した株価上昇よりも印象的です。それで、市場全体が株に対してより慎重になったと結論付けることができます。P/E比率が4.81と比較的低いことも、市場が懸念していることを示唆しています。
株価収益率(TSR)を考慮することも投資家にとって重要です。株価のリターンは株価の変動しか反映しませんが、TSRには配当金の価値(再投資された場合)、割引資本調達やスピンオフの恩恵なども含まれます。株が生成するリターンをより包括的に提示すると言えます。実際、過去5年間のPAX Global TechnologyのTSRは102%で、先に述べた株価のリターンを上回っています。会社が支払った配当金が株主リターンを増加させたのです。合計株主リターン。
別の視点
残念ながら、PAX Global Technologyの株主は今年22%減少しており(配当を含む)、広範な市場の18%以上の下降より悪い結果です。しかし、落ちる市場にはオーバーセールされた株が必ずあります。重要なのは、基本的な開発に目を向けることです。長期的な投資家はそこまで動揺していないと思われます。なぜなら、5年間で年率15%収益を上げたからです。最近の売り込みはチャンスである可能性があるため、長期的な成長トレンドの兆候を示すファンダメンタルデータのチェックが価値があるかもしれません。長期的な株価のパフォーマンスを追跡するのは常に興味深いことです。ただし、PAX Global Technologyをより理解するためには、多くの他の要因を考慮する必要があります。