Chr. Hansen Holding (CPH:CHR) Shareholders Have Enjoyed A 36% Share Price Gain

It hasn't been the best quarter for Chr. Hansen Holding A/S (CPH:CHR) shareholders, since the share price has fallen 14% in that time. But the silver lining is the stock is up over five years. Unfortunately its return of 36% is below the market return of 88%.

See our latest analysis for Chr. Hansen Holding

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over half a decade, Chr. Hansen Holding managed to grow its earnings per share at 5.0% a year. This EPS growth is reasonably close to the 6% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Indeed, it would appear the share price is reacting to the EPS.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Chr. Hansen Holding's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered Chr. Hansen Holding's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Chr. Hansen Holding's TSR of 47% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Chr. Hansen Holding shareholders gained a total return of 3.4% during the year. But that was short of the market average. On the bright side, the longer term returns (running at about 8% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Case in point: We've spotted 2 warning signs for Chr. Hansen Holding you should be aware of, and 1 of them is a bit unpleasant.

But note: Chr. Hansen Holding may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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