When we invest, we’re generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. To wit, the Ta Ann Holdings Berhad share price has climbed 24% in five years, easily topping the market return of 5.8% (ignoring dividends). On the other hand, the more recent gains haven’t been so impressive, with shareholders gaining just 17%, including dividends.
So let’s assess the underlying fundamentals over the last 5 years and see if they’ve moved in lock-step with shareholder returns.
See our latest analysis for Ta Ann Holdings Berhad
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Ta Ann Holdings Berhad managed to grow its earnings per share at 24% a year. This EPS growth is higher than the 4% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company. This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.05.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Ta Ann Holdings Berhad’s key metrics by checking this interactive graph of Ta Ann Holdings Berhad’s earnings, revenue and cash flow.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Ta Ann Holdings Berhad the TSR over the last 5 years was 88%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
It’s good to see that Ta Ann Holdings Berhad has rewarded shareholders with a total shareholder return of 17% in the last twelve months. That’s including the dividend. That’s better than the annualised return of 13% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We’ve spotted 1 warning sign for Ta Ann Holdings Berhad you should be aware of.
