Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Lena Gold-Mining Public Joint Stock Company Lenzoloto (MCX:LNZL) share price is up 43% in the last year, clearly besting than the market return of around 19% (not including dividends). So that should have shareholders smiling. In contrast, the longer term returns are negative, since the share price is 27% lower than it was three years ago.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last year Lena Gold-Mining Lenzoloto grew its earnings per share, moving from a loss to a profit. We think the growth looks very prospective, so we're not surprised the market liked it too. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Lena Gold-Mining Lenzoloto's key metrics by checking this interactive graph of Lena Gold-Mining Lenzoloto's earnings, revenue and cash flow.
A Different Perspective
It's good to see that Lena Gold-Mining Lenzoloto has rewarded shareholders with a total shareholder return of 43% in the last twelve months. That gain is better than the annual TSR over five years, which is 5.8%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on RU exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.