Adani Transmission (NSE:ADANITRANS) Shareholders Have Enjoyed A Whopping 858% Share Price Gain

Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held Adani Transmission Limited (NSE:ADANITRANS) shares for the last five years, while they gained 858%. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 46% in about a quarter.

It really delights us to see such great share price performance for investors.

Check out our latest analysis for Adani Transmission

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 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).

Adani Transmission's earnings per share are down 26% per year, despite strong share price performance over five years.

This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

It is not great to see that revenue has dropped by per year over five years. So it seems one might have to take closer look at earnings and revenue trends to see how they might influence the share price.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We know that Adani Transmission has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Adani Transmission

A Different Perspective

We're pleased to report that Adani Transmission shareholders have received a total shareholder return of 11% over one year. However, the TSR over five years, coming in at 57% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. 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. Even so, be aware that Adani Transmission is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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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.
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