Naftna Industrija Srbije a.d (BELEX:NIIS) shareholders YoY returns are lagging the company's 152% one-year earnings growth

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the Naftna Industrija Srbije a.d. (BELEX:NIIS) share price is 45% higher than it was a year ago, much better than the market return of around 25% (not including dividends) in the same period. That's a solid performance by our standards! And shareholders have also done well over the long term, with an increase of 36% in the last three years.

Since the long term performance has been good but there's been a recent pullback of 5.8%, let's check if the fundamentals match the share price.

Check out our latest analysis for Naftna Industrija Srbije a.d

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 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.

Naftna Industrija Srbije a.d was able to grow EPS by 152% in the last twelve months. This EPS growth is significantly higher than the 45% increase in the share price. Therefore, it seems the market isn't as excited about Naftna Industrija Srbije a.d as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 1.48.

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 Naftna Industrija Srbije a.d has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Naftna Industrija Srbije a.d has rewarded shareholders with a total shareholder return of 45% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 2% 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. It's always interesting to track share price performance over the longer term. But to understand Naftna Industrija Srbije a.d better, we need to consider many other factors. For instance, we've identified 1 warning sign for Naftna Industrija Srbije a.d that you should be aware of.

We will like Naftna Industrija Srbije a.d 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 Serbian exchanges.

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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.