Advertisement
U.S. markets open in 33 minutes
  • S&P Futures

    5,303.25
    -5.00 (-0.09%)
     
  • Dow Futures

    40,152.00
    +8.00 (+0.02%)
     
  • Nasdaq Futures

    18,474.75
    -29.00 (-0.16%)
     
  • Russell 2000 Futures

    2,138.40
    0.00 (0.00%)
     
  • Crude Oil

    82.69
    +1.34 (+1.65%)
     
  • Gold

    2,228.40
    +15.70 (+0.71%)
     
  • Silver

    24.66
    -0.10 (-0.39%)
     
  • EUR/USD

    1.0803
    -0.0027 (-0.25%)
     
  • 10-Yr Bond

    4.2220
    +0.0260 (+0.62%)
     
  • Vix

    13.00
    +0.22 (+1.72%)
     
  • GBP/USD

    1.2634
    -0.0004 (-0.03%)
     
  • USD/JPY

    151.1930
    -0.0530 (-0.04%)
     
  • Bitcoin USD

    70,467.24
    +365.13 (+0.52%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.81
    +20.83 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Shriro Holdings' (ASX:SHM) investors will be pleased with their impressive 105% return over the last year

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Shriro Holdings Limited (ASX:SHM) share price is 87% higher than it was a year ago, much better than the market return of around 27% (not including dividends) in the same period. That's a solid performance by our standards! In contrast, the longer term returns are negative, since the share price is 6.7% lower than it was three years ago.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

See our latest analysis for Shriro Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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).

During the last year Shriro Holdings grew its earnings per share (EPS) by 180%. It's fair to say that the share price gain of 87% did not keep pace with the EPS growth. So it seems like the market has cooled on Shriro Holdings, despite the growth. Interesting. The caution is also evident in the lowish P/E ratio of 5.12.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

It might be well worthwhile taking a look at our free report on Shriro Holdings' 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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Shriro Holdings' TSR for the last 1 year was 105%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Shriro Holdings has rewarded shareholders with a total shareholder return of 105% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 6% 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. 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. For instance, we've identified 4 warning signs for Shriro Holdings (1 can't be ignored) that you should be aware of.

We will like Shriro Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Advertisement