Recent 10% pullback isn't enough to hurt long-term RAPCO Investment PJSC (ADX:RAPCO) shareholders, they're still up 68% over 5 years

RAPCO Investment PJSC (ADX:RAPCO) shareholders might be concerned after seeing the share price drop 10% in the last week. But at least the stock is up over the last five years. In that time, it is up 68%, which isn't bad, but is below the market return of 270%.

In light of the stock dropping 10% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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. 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, RAPCO Investment PJSC moved from a loss to profitability. That would generally be considered a positive, so we'd hope to see the share price to rise. 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. In fact, the RAPCO Investment PJSC stock price is 1.5% lower in the last three years. In the same period, EPS is up 107% per year. So there seems to be a mismatch between the positive EPS growth and the change in the share price, which is down -0.5% per year.

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

Dive deeper into RAPCO Investment PJSC's key metrics by checking this interactive graph of RAPCO Investment PJSC's earnings, revenue and cash flow.

A Different Perspective

It's good to see that RAPCO Investment PJSC has rewarded shareholders with a total shareholder return of 28% in the last twelve months. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for RAPCO Investment PJSC you should know about.

Of course RAPCO Investment PJSC may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Emirian exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.