Camtek (NASDAQ:CAMT) pulls back 15% this week, but still delivers shareholders incredible 61% CAGR over 5 years
Camtek Ltd. (NASDAQ:CAMT) shareholders have seen the share price descend 22% over the month. But that doesn't undermine the fantastic longer term performance (measured over five years). In fact, during that period, the share price climbed 934%. Impressive! So it might be that some shareholders are taking profits after good performance. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price. We love happy stories like this one. The company should be really proud of that performance!
Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.
Check out our latest analysis for Camtek
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
During the last half decade, Camtek became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the Camtek share price is up 390% in the last three years. In the same period, EPS is up 41% per year. Notably, the EPS growth has been slower than the annualised share price gain of 70% over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What about the Total Shareholder Return (TSR)?
We've already covered Camtek's share price action, but we should also mention its total shareholder return (TSR). 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. Its history of dividend payouts mean that Camtek's TSR of 996% over the last 5 years is better than the share price return.
A Different Perspective
It's good to see that Camtek has rewarded shareholders with a total shareholder return of 46% in the last twelve months. Having said that, the five-year TSR of 61% a year, is even better. 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 1 warning sign for Camtek that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
