The FCR Immobilien (ETR:FC9) Share Price Is Up 14% And Shareholders Are Holding On

If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the FCR Immobilien AG (ETR:FC9) share price is up 14% in the last year, clearly besting the market return of around 1.2% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

View our latest analysis for FCR Immobilien

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 last year FCR Immobilien grew its earnings per share (EPS) by 83%. It's fair to say that the share price gain of 14% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about FCR Immobilien as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 8.86.

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

We know that FCR Immobilien has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

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, FCR Immobilien's TSR for the last year was 17%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

FCR Immobilien shareholders should be happy with the total gain of 17% over the last twelve months, including dividends. 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. To that end, you should learn about the 4 warning signs we've spotted with FCR Immobilien (including 1 which is is a bit unpleasant) .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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