Shareholders of Macquarie Telecom Group (ASX:MAQ) Must Be Delighted With Their 602% Total Return

Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. Don't believe it? Then look at the Macquarie Telecom Group Limited (ASX:MAQ) share price. It's 530% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 18% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 15% in 90 days).

We love happy stories like this one. The company should be really proud of that performance!

Check out our latest analysis for Macquarie Telecom Group

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 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 last half decade, Macquarie Telecom Group became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

Dive deeper into Macquarie Telecom Group's key metrics by checking this interactive graph of Macquarie Telecom Group's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Macquarie Telecom Group's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Macquarie Telecom Group's TSR of 602% over the last 5 years is better than the share price return.

A Different Perspective

We're pleased to report that Macquarie Telecom Group shareholders have received a total shareholder return of 134% over one year. That gain is better than the annual TSR over five years, which is 48%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Macquarie Telecom Group better, we need to consider many other factors. Even so, be aware that Macquarie Telecom Group is showing 1 warning sign in our investment analysis , you should know about...

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 AU 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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