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Did Changing Sentiment Drive Sands China's (HKG:1928) Share Price Down By 26%?

Sands China Ltd. (HKG:1928) shareholders should be happy to see the share price up 11% in the last month. But in truth the last year hasn't been good for the share price. In fact the stock is down 26% in the last year, well below the market return.

View our latest analysis for Sands China

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Even though the Sands China share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

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It's fair to say that the share price does not seem to be reflecting the EPS growth. But we might find some different metrics explain the share price movements better.

We don't see any weakness in the Sands China's dividend so the steady payout can't really explain the share price drop. From what we can see, revenue is pretty flat, so that doesn't really explain the share price drop. Of course, it could simply be that it simply fell short of the market consensus expectations.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

SEHK:1928 Income Statement April 20th 2020
SEHK:1928 Income Statement April 20th 2020

Sands China is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Sands China stock, you should check out this free report showing analyst consensus estimates for future profits.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Sands China the TSR over the last year was -22%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While the broader market lost about 15% in the twelve months, Sands China shareholders did even worse, losing 22% (even including dividends) . However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 5.4%, 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 Sands China better, we need to consider many other factors. For instance, we've identified 3 warning signs for Sands China that you should be aware of.

Of course Sands China may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.