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The Piraeus Port Authority (ATH:PPA) Share Price Has Gained 69% And Shareholders Are Hoping For More

Simply Wall St

One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, Piraeus Port Authority S.A. (ATH:PPA) shareholders have seen the share price rise 69% over three years, well in excess of the market return (41%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 33% , including dividends .

Check out our latest analysis for Piraeus Port Authority

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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Piraeus Port Authority was able to grow its EPS at 135% per year over three years, sending the share price higher. The average annual share price increase of 19% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.

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

ATSE:PPA Past and Future Earnings, February 20th 2020
ATSE:PPA Past and Future Earnings, February 20th 2020

It might be well worthwhile taking a look at our free report on Piraeus Port Authority's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Piraeus Port Authority the TSR over the last 3 years was 74%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Piraeus Port Authority shareholders are up 33% for the year (even including dividends) . Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 7.1% over half a decade It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Piraeus Port Authority better, we need to consider many other factors. Be aware that Piraeus Port Authority is showing 1 warning sign in our investment analysis , you should know about...

Of course Piraeus Port Authority 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 GR 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.