Shareholders of SRP Groupe (EPA:SRP) Must Be Delighted With Their 324% Total Return

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the SRP Groupe S.A. (EPA:SRP) share price has soared 116% in the last year. Most would be very happy with that, especially in just one year! Better yet, the share price has gained 190% in the last quarter. In contrast, the longer term returns are negative, since the share price is 75% lower than it was three years ago.

View our latest analysis for SRP Groupe

Because SRP Groupe made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

SRP Groupe actually shrunk its revenue over the last year, with a reduction of 6.4%. We're a little surprised to see the share price pop 116% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between SRP Groupe's total shareholder return (TSR) and its share price change, which we've covered above. 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. SRP Groupe hasn't been paying dividends, but its TSR of 324% exceeds its share price return of 116%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

It's good to see that SRP Groupe has rewarded shareholders with a total shareholder return of 324% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand SRP Groupe better, we need to consider many other factors. Even so, be aware that SRP Groupe is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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