Tokyo Chuo Auction Holdings (HKG:1939) delivers shareholders solid 19% CAGR over 5 years, surging 226% in the last week alone

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. Long term Tokyo Chuo Auction Holdings Limited (HKG:1939) shareholders would be well aware of this, since the stock is up 127% in five years. It's up an even more impressive 257% in about a month.

Since it's been a strong week for Tokyo Chuo Auction Holdings shareholders, let's have a look at trend of the longer term fundamentals.

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Tokyo Chuo Auction Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years Tokyo Chuo Auction Holdings saw its revenue shrink by 16% per year. Given that scenario, we wouldn't have expected the share price to rise 18% per year, but that's what it did. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Tokyo Chuo Auction Holdings' total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Tokyo Chuo Auction Holdings shareholders, and that cash payout contributed to why its TSR of 138%, over the last 5 years, is better than the share price return.

A Different Perspective

It's nice to see that Tokyo Chuo Auction Holdings shareholders have received a total shareholder return of 114% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 19% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for Tokyo Chuo Auction Holdings (2 are a bit unpleasant) that you should be aware of.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

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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.