While some are content with an index fund, active investors aim to find some truly magnificent investments on the stock market. When an investor finds a multi-bagger (a stock that goes up more than 200%), it makes a big difference to their portfolio. For example, Haichang Ocean Park Holdings Ltd. (HKG:2255) generated a magnificent return of 679% in a single year. On top of that, the stock price is up 85% in about a quarter. The company released its financial results recently; you can keep up to date with the latest figures by reading our corporate report. Looking back, the stock price is 219% higher than it was three years ago. We are really pleased to see such a great share price performance for investors.
Let’s take a look at the longer term underlying fundamentals and see if they have been consistent with shareholder returns.
Check out our latest analysis for Haichang Ocean Park Holdings
In his test The Graham-and-Doddsville super-investors Warren Buffett has described how stock prices don’t always rationally reflect a company’s value. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
Over the past year, Haichang Ocean Park Holdings has increased its earnings per share from a loss to a profit.
When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at stock price performance.
However, the 111% annual revenue growth would help. Many companies go through a phase where they have to give up some profits to drive business development, and sometimes that’s for the best.
The image below shows how earnings and income have tracked over time (if you click on the image you can see more details).
We consider it positive that insiders have made significant purchases over the past year. Even so, future earnings will be far more important to whether current shareholders are making money. So it makes a lot of sense to check out what analysts think Haichang Ocean Park Holdings will earn in the future (free earnings predictions).
A different perspective
It’s nice to see that Haichang Ocean Park Holdings shareholders have received a total shareholder return of 679% over the past year. That’s better than the 26% annualized return over half a decade, which implies the company has been doing better recently. At best, this may hint at genuine trading momentum, implying that now could be a great time to dig deeper. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. For example, we found 4 warning signs for Haichang Ocean Park Holdings (2 are a little nasty!) that you should be aware of before investing here.
Haichang Ocean Park Holdings isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on HK exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.