Investors Who Bought NBI Bearings Europe (BME:NBI) Shares Five Years Ago Are Now Up 172%

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 NBI Bearings Europe, S.A. (BME:NBI) stock is up an impressive 172% over the last five years. On top of that, the share price is up 11% in about a quarter. But this could be related to the strong market, which is up 12% in the last three months.

See our latest analysis for NBI Bearings Europe

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the five years of share price growth, NBI Bearings Europe moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

It might be well worthwhile taking a look at our free report on NBI Bearings Europe's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, NBI Bearings Europe's TSR for the last 5 years was 177%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Although it hurts that NBI Bearings Europe returned a loss of 5.5% in the last twelve months, the broader market was actually worse, returning a loss of 8.5%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 23% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand NBI Bearings Europe better, we need to consider many other factors. Take risks, for example - NBI Bearings Europe has 2 warning signs (and 1 which is potentially serious) we think you should know about.

We will like NBI Bearings Europe 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 ES 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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