Not the best quarter Power Root Berhad (KLSE:PWROOT) shareholders, the share price has fallen 12% in that time. On the bright side, returns over the past five years have been very good. After all, the stock price rose 26% during this period, outpacing the market. Unfortunately, not all shareholders hold for the long term, so spare a thought for the shareholder who has been caught up in the 16% drop in the last 12 months.
So let's assess the underlying fundamentals over the past five years to see if they have kept pace with shareholder returns.
Check out our latest analysis for Power Root Berhad.
in his essay Graham & Doddsville SuperInvestors Warren Buffett has said that stock prices do not always rationally reflect the value of a company. One imperfect but simple way to consider how the market perception of a company has changed is to compare the change in the earnings per share (EPS) with the share price movement.
During the five-year period of share price growth, Power Root Berhad achieved compound earnings per share (EPS) growth of 29% per year. This EPS growth is higher than the average annual increase in the share price of 5%. As such, the market doesn't seem to be too enthusiastic about this stock lately.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend taking a closer look at its historical growth trends, available here.
What will happen to the dividend?
When looking at return on investment, it is important to consider the following differences: Total shareholder return (TSR) and stock price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return delivered by a stock. For Power Root Berhad, the TSR for the last 5 years is 60%. This exceeds the stock return mentioned earlier. Therefore, the dividend paid by the company is total Shareholder returns.
different perspective
While the broader market has gained about 7.0% in the last year, Power Root Berhad shareholders have lost 11% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Long-term investors won't be too upset, as they can earn 10% annually over five years. The recent selloff could be an opportunity, so it might be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track stock performance over the long term. However, to understand Power Root Berhad better, you need to consider many other factors. For example, we discovered that 2 warning signs for Power Root Berhad What you need to know before investing here.
Power Root Berhad would be even more likable if we see significant insider buying.While you wait, check this out free A list of growing companies with significant recent insider purchasing.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
