JDC Group (ETR:JDC) jumps 12% this week, taking five-year gains to 328%

Buying shares in the best businesses can build meaningful wealth for you and your family. While not every stock performs well, when investors win, they can win big. For example, the JDC Group AG (ETR:JDC) share price is up a whopping 328% in the last half decade, a handsome return for long term holders. This just goes to show the value creation that some businesses can achieve. It's also up 14% in about a month. We note that JDC Group reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.

Since it's been a strong week for JDC Group shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for JDC Group

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. 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, JDC Group 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).

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

A Different Perspective

It's good to see that JDC Group has rewarded shareholders with a total shareholder return of 36% in the last twelve months. That's better than the annualised return of 34% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with JDC Group , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of undervalued small caps 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 German 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.