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Did Fleetwood's (ASX:FWD) Share Price Deserve to Gain 34%?

Simply Wall St

It might be of some concern to shareholders to see the Fleetwood Corporation Limited (ASX:FWD) share price down 14% in the last month. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 34%, less than the market return of 41%.

View our latest analysis for Fleetwood

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 last half decade, Fleetwood became profitable. That would generally be considered a positive, so we'd expect the share price to be up.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

ASX:FWD Past and Future Earnings, February 28th 2020

This free interactive report on Fleetwood's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Fleetwood's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Fleetwood shareholders, and that cash payout contributed to why its TSR of 47%, over the last 5 years, is better than the share price return.

A Different Perspective

Fleetwood shareholders gained a total return of 5.5% during the year. But that was short of the market average. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 8.0% over five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It's always interesting to track share price performance over the longer term. But to understand Fleetwood better, we need to consider many other factors. For instance, we've identified 1 warning sign for Fleetwood that you should be aware of.

Of course Fleetwood 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 AU 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.