Can You Imagine How Fly Leasing's (NYSE:FLY) Shareholders Feel About The 66% Share Price Increase?
These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Fly Leasing Limited (NYSE:FLY) share price is up 66% in the last year, clearly besting the market return of around 21% (not including dividends). So that should have shareholders smiling. And shareholders have also done well over the long term, with an increase of 32% in the last three years.
Check out our latest analysis for Fly Leasing
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Fly Leasing was able to grow EPS by 163% in the last twelve months. It's fair to say that the share price gain of 66% did not keep pace with the EPS growth. So it seems like the market has cooled on Fly Leasing, despite the growth. Interesting. The caution is also evident in the lowish P/E ratio of 3.31.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Fly Leasing has grown profits over the years, but the future is more important for shareholders. This free interactive report on Fly Leasing's balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Fly Leasing's total shareholder return (TSR) and its share price change, which we've covered above. 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. Its history of dividend payouts mean that Fly Leasing's TSR of 66% over the last year is better than the share price return.
A Different Perspective
It's good to see that Fly Leasing has rewarded shareholders with a total shareholder return of 66% in the last twelve months. That's better than the annualised return of 6.9% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Fly Leasing (including 2 which is shouldn't be ignored) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.
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.
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