If You Had Bought pferdewetten.de (ETR:EMH) Shares Five Years Ago You'd Have Earned 114% Returns

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 when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of pferdewetten.de AG (ETR:EMH) stock is up an impressive 114% over the last five years. It's also up 10% in about a month. But the price may well have benefitted from a buoyant market, since stocks have gained 4.6% in the last thirty days.

View our latest analysis for pferdewetten.de

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the five years of share price growth, pferdewetten.de 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.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that pferdewetten.de has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling pferdewetten.de stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of pferdewetten.de, it has a TSR of 128% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that pferdewetten.de has rewarded shareholders with a total shareholder return of 13% in the last twelve months. That's including the dividend. However, the TSR over five years, coming in at 18% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand pferdewetten.de better, we need to consider many other factors. Take risks, for example - pferdewetten.de has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

If you are like me, then you will 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 DE 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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