Did You Miss NACL Industries' (NSE:NACLIND) 38% Share Price Gain?

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. For example, the NACL Industries Limited (NSE:NACLIND) share price is up 38% in the last year, clearly besting the market decline of around 1.9% (not including dividends). That's a solid performance by our standards! However, the stock hasn't done so well in the longer term, with the stock only up 5.7% in three years.

View our latest analysis for NACL Industries

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).

During the last year NACL Industries grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We doubt the modest 0.5% dividend yield is doing much to support the share price. We think that the revenue growth of 17% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at NACL Industries' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that NACL Industries rewarded shareholders with a total shareholder return of 39% over the last year. That's including the dividend. That gain actually surpasses the 2.3% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting NACL Industries on your watchlist. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for NACL Industries you should be aware of, and 2 of them are a bit unpleasant.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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