Investors Who Bought Indoco Remedies (NSE:INDOCO) Shares A Year Ago Are Now Up 66%

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Indoco Remedies Limited (NSE:INDOCO) share price is 66% higher than it was a year ago, much better than the market return of around 1.1% (not including dividends) in the same period. So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 1.1% in the last three years.

See our latest analysis for Indoco Remedies

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Indoco Remedies was able to grow EPS by 249% in the last twelve months. This EPS growth is significantly higher than the 66% increase in the share price. So it seems like the market has cooled on Indoco Remedies, despite the growth. Interesting. Having said that, the market is still optimistic, given the P/E ratio of 58.92.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Indoco Remedies has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

We're pleased to report that Indoco Remedies shareholders have received a total shareholder return of 67% over one year. And that does include the dividend. Notably the five-year annualised TSR loss of 4% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Is Indoco Remedies cheap compared to other companies? These 3 valuation measures might help you decide.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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