Did You Participate In Any Of Elinoil Hellenic Petroleum's (ATH:ELIN) Fantastic 193% Return ?

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%. One great example is Elinoil Hellenic Petroleum Company S.A. (ATH:ELIN) which saw its share price drive 121% higher over five years. On top of that, the share price is up 20% in about a quarter. But this could be related to the strong market, which is up 23% in the last three months.

Check out our latest analysis for Elinoil Hellenic Petroleum

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Elinoil Hellenic Petroleum's earnings per share are down 7.4% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

In contrast revenue growth of 15% per year is probably viewed as evidence that Elinoil Hellenic Petroleum is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Elinoil Hellenic Petroleum's financial health with this free report on its balance sheet.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Elinoil Hellenic Petroleum's total shareholder return (TSR) and its share price change, which we've covered above. 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. Elinoil Hellenic Petroleum's TSR of 193% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

While it's certainly disappointing to see that Elinoil Hellenic Petroleum shares lost 8.5% throughout the year, that wasn't as bad as the market loss of 13%. Longer term investors wouldn't be so upset, since they would have made 24%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand Elinoil Hellenic Petroleum better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Elinoil Hellenic Petroleum (of which 2 make us uncomfortable!) you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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