Investors Who Bought TCM Group (CPH:TCM) Shares Three Years Ago Are Now Up 29%

Low-cost index funds make it easy to achieve average market returns. But in any diversified portfolio of stocks, you'll see some that fall short of the average. For example, the TCM Group A/S (CPH:TCM) share price return of 29% over three years lags the market return in the same period. In the last year the stock has gained 11%.

Check out our latest analysis for TCM Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years of share price growth, TCM Group achieved compound earnings per share growth of 28% per year. The average annual share price increase of 9% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.73.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into TCM Group's key metrics by checking this interactive graph of TCM Group's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered TCM Group's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. TCM Group's TSR of 35% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Over the last year TCM Group shareholders have received a TSR of 11%. While you don't go broke making a profit, this return was actually lower than the average market return of about 25%. But the (superior) three-year TSR of 11% per year is some consolation. We prefer focus on longer term returns, as they are usually a more meaningful indication of the underlying business. Before deciding if you like the current share price, check how TCM Group scores on these 3 valuation metrics.

We will like TCM Group 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 DK 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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