Investors Who Bought Elvalhalcor Hellenic Copper and Aluminium Industry (ATH:ELHA) Shares A Year Ago Are Now Up 84%

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Elvalhalcor Hellenic Copper and Aluminium Industry S.A. (ATH:ELHA) share price is 84% higher than it was a year ago, much better than the market return of around 39% (not including dividends) in the same period. So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 21% in three years.

View our latest analysis for Elvalhalcor Hellenic Copper and Aluminium Industry

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

During the last year, Elvalhalcor Hellenic Copper and Aluminium Industry actually saw its earnings per share drop 31%.

So we don't think that investors are paying too much attention to EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

We doubt the modest 1.5% dividend yield is doing much to support the share price. Revenue was pretty stable on last year, so deeper research might be needed to explain the share price rise.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Elvalhalcor Hellenic Copper and Aluminium Industry's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Elvalhalcor Hellenic Copper and Aluminium Industry's TSR for the last year was 88%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Pleasingly, Elvalhalcor Hellenic Copper and Aluminium Industry's total shareholder return last year was 88%. That includes the value of the dividend. That gain actually surpasses the 8% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Elvalhalcor Hellenic Copper and Aluminium Industry on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Elvalhalcor Hellenic Copper and Aluminium Industry better, we need to consider many other factors. Even so, be aware that Elvalhalcor Hellenic Copper and Aluminium Industry is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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