Stock Analysis

Shareholders of Tribal Group (LON:TRB) Must Be Delighted With Their 384% Total Return

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AIM:TRB
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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. One great example is Tribal Group plc (LON:TRB) which saw its share price drive 233% higher over five years. It's also good to see the share price up 29% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 12% in 90 days).

See our latest analysis for Tribal Group

Tribal Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Tribal Group saw its revenue shrink by 8.0% per year. Given that scenario, we wouldn't have expected the share price to rise 27% per year, but that's what it did. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, we are a bit cautious in this kind of situation.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
AIM:TRB Earnings and Revenue Growth December 29th 2020

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

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Tribal Group, it has a TSR of 384% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Tribal Group shareholders have received a total shareholder return of 32% over the last year. And that does include the dividend. However, that falls short of the 37% TSR per annum it has made for shareholders, each year, over five years. 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. For instance, we've identified 1 warning sign for Tribal Group that you should be aware of.

But note: Tribal Group 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 GB exchanges.

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