Optimism for BR Advisory Partners Participações (BVMF:BRBI11) has grown this past week, despite one-year decline in earnings

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. To wit, the BR Advisory Partners Participações S.A. (BVMF:BRBI11) share price is 11% higher than it was a year ago, much better than the market return of around 2.5% (not including dividends) in the same period. So that should have shareholders smiling. BR Advisory Partners Participações hasn't been listed for long, so it's still not clear if it is a long term winner.

The past week has proven to be lucrative for BR Advisory Partners Participações investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for BR Advisory Partners Participações

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the last twelve months, BR Advisory Partners Participações actually shrank its EPS by 53%.

Given the share price gain, we doubt the market is measuring progress with EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We note that the most recent dividend payment is higher than the payment a year ago, so that may have assisted the share price. Income-seeking investors probably helped bid up the stock price. Though we must add that the revenue growth of 35% year on year would have helped paint a pretty picture.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that BR Advisory Partners Participações has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on BR Advisory Partners Participações' balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, BR Advisory Partners Participações' TSR for the last 1 year was 20%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that BR Advisory Partners Participações shareholders have gained 20% over the last year, including dividends. And the share price momentum remains respectable, with a gain of 56% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand BR Advisory Partners Participações better, we need to consider many other factors. For example, we've discovered 2 warning signs for BR Advisory Partners Participações (1 is a bit concerning!) that you should be aware of before investing here.

We will like BR Advisory Partners Participações 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 Brazilian exchanges.

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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.