Stock Analysis

Shaver Shop Group (ASX:SSG) Has Gifted Shareholders With A Fantastic 198% Total Return On Their Investment

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ASX:SSG
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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the Shaver Shop Group Limited (ASX:SSG) share price has flown 133% in the last three years. Most would be happy with that. In more good news, the share price has risen -1.3% in thirty days.

Check out our latest analysis for Shaver Shop Group

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.

Shaver Shop Group was able to grow its EPS at 6.6% per year over three years, sending the share price higher. This EPS growth is lower than the 33% average annual increase in the share price. This indicates that the market is feeling more optimistic on the stock, after the last few years of progress. It's not unusual to see the market 're-rate' a stock, after a few years of growth.

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

earnings-per-share-growth
ASX:SSG Earnings Per Share Growth January 22nd 2021

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Shaver Shop Group's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Shaver Shop Group, it has a TSR of 198% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Shaver Shop Group shareholders have gained 88% (in total) over the last year. And yes, that does include the dividend. That gain actually surpasses the 44% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Shaver Shop Group 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 2 warning signs for Shaver Shop Group you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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

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