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If You Had Bought Texas Capital Bancshares (NASDAQ:TCBI) Shares A Year Ago You'd Have Earned 88% Returns

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While Texas Capital Bancshares, Inc. (NASDAQ:TCBI) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 11% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 88%.

See our latest analysis for Texas Capital Bancshares

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 year Texas Capital Bancshares grew its earnings per share (EPS) by 169%. This EPS growth is significantly higher than the 88% increase in the share price. Therefore, it seems the market isn't as excited about Texas Capital Bancshares as it was before. This could be an opportunity.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
earnings-per-share-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Texas Capital Bancshares' earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Texas Capital Bancshares shareholders have received a total shareholder return of 88% over one year. That's better than the annualised return of 4% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Texas Capital Bancshares better, we need to consider many other factors. For instance, we've identified 2 warning signs for Texas Capital Bancshares (1 is concerning) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.