Unicasa Indústria de Móveis (BVMF:UCAS3) Has Gifted Shareholders With A Fantastic 133% Total Return On Their Investment

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term Unicasa Indústria de Móveis S.A. (BVMF:UCAS3) shareholders would be well aware of this, since the stock is up 104% in five years. We note the stock price is up 4.0% in the last seven days.

View our latest analysis for Unicasa Indústria de Móveis

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.

During the five years of share price growth, Unicasa Indústria de Móveis moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

Dive deeper into Unicasa Indústria de Móveis' key metrics by checking this interactive graph of Unicasa Indústria de Móveis'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. As it happens, Unicasa Indústria de Móveis' TSR for the last 5 years was 133%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Unicasa Indústria de Móveis provided a TSR of 21% over the last twelve months. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 18% per year over five year. This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Unicasa Indústria de Móveis better, we need to consider many other factors. Even so, be aware that Unicasa Indústria de Móveis is showing 2 warning signs in our investment analysis , you should know about...

We will like Unicasa Indústria de Móveis better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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