Wilson Sons Holdings Brasil (BVMF:PORT3) shareholders YoY returns are lagging the company's 25% one-year earnings growth

The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the Wilson Sons Holdings Brasil S.A. (BVMF:PORT3) share price is up 4.8% in the last 1 year, clearly besting the market decline of around 7.4% (not including dividends). That's a solid performance by our standards! Wilson Sons Holdings Brasil hasn't been listed for long, so it's still not clear if it is a long term winner.

While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

See our latest analysis for Wilson Sons Holdings Brasil

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Wilson Sons Holdings Brasil was able to grow EPS by 25% in the last twelve months. It's fair to say that the share price gain of 4.8% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Wilson Sons Holdings Brasil as it was before. This could be an opportunity.

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

We know that Wilson Sons Holdings Brasil has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Wilson Sons Holdings Brasil's TSR for the last 1 year was 9.9%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Wilson Sons Holdings Brasil shareholders should be happy with the total gain of 9.9% over the last twelve months, including dividends. And the share price momentum remains respectable, with a gain of 16% in the last three months. This suggests the company is continuing to win over new investors. 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. For instance, we've identified 2 warning signs for Wilson Sons Holdings Brasil that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.