If You Had Bought TAJGVK Hotels & Resorts (NSE:TAJGVK) Shares Five Years Ago You'd Have Earned92% Returns

TAJGVK Hotels & Resorts Limited (NSE:TAJGVK) shareholders might be concerned after seeing the share price drop 12% in the last month. Looking further back, the stock has generated good profits over five years. After all, the share price is up a market-beating 92% in that time. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 19% decline over the last twelve months.

Check out our latest analysis for TAJGVK Hotels & Resorts

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the five years of share price growth, TAJGVK Hotels & Resorts moved from a loss to profitability. That's generally thought to be a genuine positive, so we would expect to see an increasing share price. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the TAJGVK Hotels & Resorts share price is down 16% in the last three years. During the same period, EPS grew by 87% each year. It would appear there's a real mismatch between the increasing EPS and the share price, which has declined -5.6% a year for three years.

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

We know that TAJGVK Hotels & Resorts has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

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 is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for TAJGVK Hotels & Resorts the TSR over the last 5 years was 95%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Investors in TAJGVK Hotels & Resorts had a tough year, with a total loss of 19% (including dividends), against a market gain of about 3.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 14%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand TAJGVK Hotels & Resorts better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with TAJGVK Hotels & Resorts , and understanding them should be part of your investment process.

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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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