Did You Participate In Any Of Computacenter's (LON:CCC) Fantastic 150% Return ?
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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on a lighter note, a good company can see its share price rise well over 100%. Long term Computacenter plc (LON:CCC) shareholders would be well aware of this, since the stock is up 124% in five years. Also pleasing for shareholders was the 18% gain in the last three months. But this move may well have been assisted by the reasonably buoyant market (up 10% in 90 days).
See our latest analysis for Computacenter
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.
Over half a decade, Computacenter managed to grow its earnings per share at 14% a year. This EPS growth is reasonably close to the 18% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Indeed, it would appear the share price is reacting to the EPS.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that Computacenter has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Computacenter will grow revenue in the future.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Computacenter's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Computacenter shareholders, and that cash payout contributed to why its TSR of 150%, over the last 5 years, is better than the share price return.
A Different Perspective
It's good to see that Computacenter has rewarded shareholders with a total shareholder return of 30% in the last twelve months. That's better than the annualised return of 20% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current share price, check how Computacenter scores on these 3 valuation metrics.
Of course Computacenter 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 GB exchanges.
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. 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.
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