Can You Imagine How MRF's (NSE:MRF) Shareholders Feel About The 32% Share Price Increase?

MRF Limited (NSE:MRF) shareholders have seen the share price descend 17% over the month. But that doesn't change the fact that the returns over the last five years have been pleasing. It has returned a market beating 32% in that time.

See our latest analysis for MRF

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over half a decade, MRF managed to grow its earnings per share at 2.7% a year. This EPS growth is lower than the 5.6% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

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

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

A Different Perspective

While it's certainly disappointing to see that MRF shares lost 6.4% throughout the year, that wasn't as bad as the market loss of 30%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 5.8% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand MRF better, we need to consider many other factors. Even so, be aware that MRF is showing 2 warning signs in our investment analysis , you should know about...

We will like MRF 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 IN 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.