The past year for KKB Engineering Berhad (KLSE:KKB) investors has not been profitable

Yahoo

27-03-2025

The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in KKB Engineering Berhad (KLSE:KKB) have tasted that bitter downside in the last year, as the share price dropped 11%. That's disappointing when you consider the market declined 0.2%. However, the longer term returns haven't been so bad, with the stock down 4.7% in the last three years.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Unhappily, KKB Engineering Berhad had to report a 1.6% decline in EPS over the last year. This reduction in EPS is not as bad as the 11% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
This free interactive report on KKB Engineering Berhad's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for KKB Engineering Berhad the TSR over the last 1 year was -7.1%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
While the broader market gained around 0.2% in the last year, KKB Engineering Berhad shareholders lost 7.1% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 2%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Take risks, for example - KKB Engineering Berhad has 2 warning signs we think you should be aware of.
If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
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