Can You Imagine How Manitou BF's (EPA:MTU) Shareholders Feel About The 49% Share Price Increase?

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. Buying under-rated businesses is one path to excess returns. To wit, the Manitou BF share price has climbed 49% in five years, easily topping the market return of 31% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 17%.

View our latest analysis for Manitou BF

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 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).

Over half a decade, Manitou BF managed to grow its earnings per share at 9.0% a year. This EPS growth is reasonably close to the 8% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Rather, the share price has approximately tracked EPS growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

What about the Total Shareholder Return (TSR)?

We've already covered Manitou BF'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. Its history of dividend payouts mean that Manitou BF's TSR of 63% over the last 5 years is better than the share price return.

A Different Perspective

It's good to see that Manitou BF has rewarded shareholders with a total shareholder return of 17% in the last twelve months. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Manitou BF better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Manitou BF .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR 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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