Churchill China (LON:CHH) investors are sitting on a loss of 57% if they invested three years ago
If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Churchill China plc (LON:CHH) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 62% share price collapse, in that time. The more recent news is of little comfort, with the share price down 50% in a year.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
Our free stock report includes 2 warning signs investors should be aware of before investing in Churchill China. Read for free now.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate three years of share price decline, Churchill China actually saw its earnings per share (EPS) improve by 15% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.
It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.
Given the healthiness of the dividend payments, we doubt that they've concerned the market. It's good to see that Churchill China has increased its revenue over the last three years. But it's not clear to us why the share price is down. It might be worth diving deeper into the fundamentals, lest an opportunity goes begging.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Churchill China stock, you should check out this FREE detailed report on its balance sheet.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Churchill China, it has a TSR of -57% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
Churchill China shareholders are down 47% for the year (even including dividends), but the market itself is up 4.9%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. To that end, you should be aware of the 2 warning signs we've spotted with Churchill China .
Of course Churchill 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 British exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
an hour ago
- Forbes
Brno Startups Leverage AI, Computer Vision, To Punch Above Their Weight
Brno, a mid-sized Czech city best known for its universities and research institutes, is becoming one of Europe's most dynamic tech ecosystems. Fueled by the regional innovation agency JIC led by director Petr Chládek, the startup incubator was founded over two decades ago by a consortium of municipalities and universities. A biologist and geographer by training, Chládek, has been the director of the JIC since 2017, told me in an interview that 'With the right balance of government support, academic excellence, and private investment, we're helping scale world-class tech companies.' Backed by strong academic partnerships, startups from Brno and the Czechia have global markets in their sights. Last week, I was able to see the results of JIC's efforts to boost local companies into the international ecosystem where they can form international partnerships within the EU, the US, and Asia. Their one-day Start-up Money conference on May 29th sought to bring together the region's leading startups with venture capital focused on early stage technology companies. Like counterpart conferences in the US, AI was in the air. VisionCraft now applies computer vision to physical rehabilitation. CEO David Tuč told me the goal is to introduce accountability and feedback into home physical therapy exercise, which many patients simply do not do. VisionCraft's new VisioTherapy platform uses motion tracking to deliver real-time feedback during at-home physical therapy sessions, which is shared with clinicians. They're raising funds to expand into the U.S. and Middle East. Lucas Loun, founder and CEO of Maia Labs Forbes Chechia Maia Labs was recently named Europe's Best HealthTech Startup for inventing ColoMaia, which adds computer vision to colonoscopy procedures, boosting cancer detection dramatically, by catching what a clinician can miss in real time. ColoMaia demonstrated a 43% increase in polyp detection rates during colonoscopies and, as further user incentives, reduces physicians' post-proceedure reporting time by 50%, Maia is already running pilots across Central and Eastern Europe, and just announced a trial with the Mayo Clinic in the US. Get Moments is an app that turns fan-shot videos from live events into personalized, shareable highlight reels using AI. Their AI editing engine automatically curates and assembles footage into branded videos in minutes. The platform has been tested at major events like the Sziget Festival, where attendees submitted over 30,000 videos, and at a Ben Cristovao concert, resulting in nearly 2,000 unique videos with a 48% share rate. Get Moments raised €500,000 from Purple Ventures in September. to enhance its AI-powered platform that transforms fan-generated content into personalized event highlight reels. While there is no way to know if it can scale into thousands of live events, not just music, but sports and wherever a crowd gathers. Motion capture. Kapnetix Kapnetix automates post-processing for motion capture in game development and visual effects. Kapnetix originated from a 2021 proof-of-concept project with 2K Games, leading to the development of AI tools that automate motion capture cleanup, significantly reducing production time for animators. Its tools reduce cleanup time from hours to minutes, allowing smaller studios to compete with AAA production quality while helping large productions stay on schedule and under budget. The company's AI solutions have attracted attention from major animation studios worldwide, including Disney Zaira, is a Brno-based space-tech startup which uses onboard, local AI to process satellite imagery in real time, rather than downloading scads of data from space. The startup has partnered with organizations such as the European Space Agency (ESA) and participates in Biomission 19 on the International Space Station and other commercial and defence missions. By filtering out irrelevant data like cloud cover before transmission, Zaira cuts communication costs by up to 98 percent. Zaitra just raised €1.7 million to expand into the US. Vrgineers, maker of the XTAL mixed-reality headset, just announced it's expanding its relationship with Lockheed Martin. Their systems combine high-end graphics with AI-enhanced realism, delivering cockpit experiences that rival actual flight. Several years ago, I tried their 4K/eye headset and it's dizzying to experience. I 'sat' in a virtual BMW and for a moment I couldn't get out because the virtual door did not open. VRfineers' Mixed Reality training systems are employed by the U.S. Air Force, NASA, and Airbus Defense. Over the past four years, $340 million in venture funding has flowed into Brno-region startups leading to $2.5 billion in VC exits. For investors, technologists, and founders alike, the message is clear: Brno is a rising force on Europe's tech map.
Bloomberg
an hour ago
- Bloomberg
EU-US Trade Talks Could Extend Beyond Trump's Deadline
Welcome to the Brussels Edition, Bloomberg's daily briefing on what matters most in the heart of the European Union. Trade talks between the EU and the US have intensified over the past week, aiming to secure at least a preliminary deal before Washington imposes a 50% tariff on nearly all EU exports. The best-case scenario would be agreement on the principles of an accord by July 9. Yet, we're told European officials believe negotiations sealing the deal in full could extend beyond President Donald Trump's deadline. Officials in Brussels remain cautious. While talks are taking place in a positive environment, they remain difficult — the EU believes the US is seeking one-sided concessions. US Commerce Secretary Howard Lutnick yesterday poured cold water on hopes for a swift accord, telling CNBC yesterday that Washington is prioritizing other partners and an agreement with the EU is likely to be the very last one that the US completes.
New York Times
2 hours ago
- New York Times
Newcastle's summer transfer strategy: Are fans right to worry about the lack of activity?
After three successive transfer windows without strengthening their first XI, Newcastle United will be active in the market this summer, but nothing has happened yet. High-profile targets already appear to be heading elsewhere, prompting the usual array of fury, froth and frustration on social media. Advertisement When the 2025 close-season's Club World Cup-enforced first mini-window shut on Tuesday, Newcastle had done little more than announce their retained list, with no senior arrivals. The window reopens on Tuesday, June 16, and runs until the night of September 1. With Paul Mitchell, the sporting director, standing down effective June 30, and Darren Eales, the chief executive, already serving his notice, are Newcastle in a state of limbo? Or are they merely biding their time? Our Newcastle writers Chris Waugh and George Caulkin examine the pressing issues at the club. Caulkin: This is multi-layered. Most obviously, head coach Eddie Howe needs some help. Last season's achievements by him and his players represent a miracle, given the discomfort of a year ago, when the squad was weakened. Howe's first XI needs refreshing — greater competition. For too long, motivation has come from within. Those players now need pushing via an injection of quality. Returning to the Champions League next season also gives them another front to fight on. Two years ago, when they last played in that competition, a skinny squad was stretched to translucency by injury. Newcastle require more depth. GO DEEPER Newcastle are back in the Champions League. It changes everything After the PSR (the Premier League's profit and sustainability rules) debacle of last summer, Newcastle are in a far stronger position, particularly after recouping fees for Miguel Almiron and Lloyd Kelly in January. So they have money available, but there are caveats. They are not the biggest wage-payers and will not be taken advantage of when it comes to the so-called 'Saudi tax' — a reference to the deep pockets of their majority owners, Saudi Arabia's Public Investment Fund (PIF). Waugh: Fundamentally, Newcastle want to significantly bolster Howe's squad while maintaining financial prudence. The owners are determined to avoid going multiple windows without investing again; they want to leave PSR headroom to recruit again in next year's winter window and beyond. Advertisement Newcastle are adamant they will not overpay for players, though, believing present asking prices are inflated. However, sizeable expenditure is anticipated; the boardroom-level desire to support Howe within sustainable limitations is absolute. There is a recognition that the squad's average age, especially at centre-half and goalkeeper, requires lowering. The majority of players being targeted are between 21 and 24; they have been recognised for their elite potential, given Newcastle cannot afford to bring in multiple established stars. Those under consideration are players who can improve the first XI and, so, the squad. Quality will take precedence over quantity. A complicating factor is UEFA's homegrown quota. Only Sean Longstaff qualifies as a 'club-trained' senior player and, while Newcastle believe they should have the depth to manage regardless, this detail has been a consideration. With John Ruddy, the reserve goalkeeper, in negotiations over an extension, now free-agents Fraser Forster and Tim Krul are unlikely to be recruited, even if their names were mentioned internally, given their homegrown credentials. Waugh: The priorities are obvious. A right-sided centre-back and right-winger (or at least another attacking player of some sort) are wanted, alongside a goalkeeper. A versatile forward is desired, and a midfielder may arrive. Brentford's Bryan Mbeumo was their top right-winger target, but his preference to join Manchester United has led to a re-evaluation. Previous offers were made for Nottingham Forest's Anthony Elanga, Antoine Semenyo of Bournemouth is admired at Newcastle and Brighton & Hove Albion's Joao Pedro is a long-term target. The club must determine whether they have the capacity to sign an adaptable attacker, a right-winger, or both. Advertisement At centre-half, Crystal Palace's Marc Guehi is still highly regarded and James Trafford of Burnley is the priority goalkeeper target. Further details can be found in the latest DealSheet. Caulkin: That idea of priority is fluid. There have been initial negotiations with Burnley over Trafford, the optics of which are not ideal, given his arrival would leave Newcastle with six goalkeepers if nobody departs before then. Yet it isn't a case of saying it should be a right-winger who comes in first. Newcastle are responding to where the market takes them and acting accordingly. Two summers ago, they already had established full-backs, but went out and signed Tino Livramento and Lewis Hall, who are both fundamental to their team now. It is not all about immediacy. Clubs who are not in need of money can hold firm. Priorities change according to circumstances. Caulkin: On the face of it, sub-optimally. 'Speed is key for us and I've reiterated that many times internally, because we have to be dynamic,' Howe said last month. 'We have to be ready to complete things very quickly because good players don't hang around for long.' Since then, Mbeumo has seemingly become unobtainable. Ipswich striker Liam Delap opted for Chelsea. Defender Dean Huijsen left Bournemouth for Real Madrid. With Manchester City already spending big and Liverpool pushing to sign Florian Wirtz and Milos Kerkez to go with early signing Jeremie Frimpong, it doesn't feel like Newcastle are moving with the dynamism Howe referenced. Yet good players are going to attract rival suitors, and when it comes to salaries, Newcastle cannot compete with a flailing Manchester United, let alone City, Liverpool or Chelsea. Other targets may simply not be available yet. One long-established mantra at Newcastle under PIF's ownership is 'process-driven' decision-making. The problem is that getting transfers over the line often requires being fleet of foot; how and whether this can work, given the flux at director level within the club, is not yet clear. Advertisement Waugh: It is only June 12. As dismissive as that sounds, it is important. Most players are either on holiday, have just finished international duty or are off to take part in the Club World Cup, while club executives are also on their breaks. The majority of the deals concluded so far have involved release clauses (Huijsen, Delap and Matheus Cunha's move from Wolves to Manchester United) or have been driven by sides wanting players signed in time for the Club World Cup. Liverpool are perhaps an exception. Putting last year's PSR-dominated window aside, Newcastle's first senior signing of the corresponding 2022-23 one was Nick Pope on June 23 (excluding Matt Targett's loan becoming permanent) and the following summer, it was Sandro Tonali on July 3. Mitchell's exit is inopportune and Howe would ideally have liked a signing by now, but it is premature to be dismayed. Waugh: Sort of, in the sense some fans are (to an extent, understandably) growing concerned about the lack of incoming. Internally, the mood is not as extreme. There has been frustration, but speed costs money and Newcastle are confident fees will become more realistic as the summer progresses. There is a recognition that it is worth waiting for the targets they want, rather than rushing to acquire someone who is not the ideal fit. Most targets whose names are in the public domain are at English clubs, leading some fans to suggest Newcastle are prioritising Premier League experience over cost. Yet the message from some insiders is that the market in continental Europe is also distorted and will not necessarily prove much cheaper. Newcastle insist they are ready to act — and, crucially, can do so even before June 30. Those at the top are confident the club will end the summer in a far stronger position than they started it. Advertisement Caulkin: Managers always want more. They always want business done early. Howe talks about being motivated by a fear of failure, so he will be fretting. The first team continue to drive everything at Newcastle; if they are considered an elite outfit, it's because of what the head coach has done, not because of their infrastructure or commercial income. So far, the help he needs has not materialised. The situations with Eales and Mitchell — two roles which should shape Newcastle's future – do not encourage stability. The Athletic has spoken to other senior figures who have talked about their uncertainty in terms of the bigger picture. Ultimately, that uncertainty will not dissipate until new appointments are in place and their vision established. The message is that Eales' successor is close to being determined — David Hopkinson, a former executive at Real Madrid, is a leading candidate — and the search for Mitchell's replacement is underway. In the short term, Newcastle have to demonstrate that the status quo remains operational and then that a new leadership model can get things done while building relationships. That first signing, whenever it comes, will calm nerves. Caulkin: The club maintain it is 'business as usual'. Mitchell will continue to direct Newcastle's transfer policy — with Howe retaining the final say — until June 30, when Eales is expected to pick up the slack. A year in charge without making a game-changing signing would not be the glossiest entry on Mitchell's CV, but this is not driving his agenda. Newcastle's plan for this entire window is his plan, at least in part. Last summer demonstrated that having a new sporting director in place guarantees nothing. Will whoever comes in next have the same ideas about strategy and recruitment? Advertisement Waugh: Steve Nickson, head of recruitment, and Andy Howe, assistant head of recruitment, took on prominent roles in the post-Dan Ashworth interim and will be empowered again. The latter has been an influential voice since the takeover, following Eddie, his uncle, to the club from fellow Premier League side Bournemouth. Targets have been selected by the head coach. He would ideally like one or two additions before pre-season begins on July 7, and definitely before the squad leave for a training camp in Austria — by which time the true direction of their window will have become clearer.
