Stock Analysis

Introducing TT Electronics (LON:TTG), A Stock That Climbed 38% In The Last Five Years

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LSE:TTG
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It hasn't been the best quarter for TT Electronics plc (LON:TTG) shareholders, since the share price has fallen 25% in that time. While that's not great, the returns over five years have been decent. The share price is up 38%, which is better than the market return of 36%.

View our latest analysis for TT Electronics

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, TT Electronics moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
LSE:TTG Earnings Per Share Growth December 10th 2020

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

What about the Total Shareholder Return (TSR)?

We've already covered TT Electronics' share price action, but we should also mention its total shareholder return (TSR). 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. TT Electronics' TSR of 55% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

While the broader market lost about 2.8% in the twelve months, TT Electronics shareholders did even worse, losing 14%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 9% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for TT Electronics you should be aware of, and 1 of them doesn't sit too well with us.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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