Bet Shemesh Engines Holdings (1997)'s (TLV:BSEN) five-year earnings growth trails the massive shareholder returns

For many, the main point of investing in the stock market is to achieve spectacular returns. And we've seen some truly amazing gains over the years. To wit, the Bet Shemesh Engines Holdings (1997) Ltd (TLV:BSEN) share price has soared 804% over five years. And this is just one example of the epic gains achieved by some long term investors. It's also up 14% in about a month. But this could be related to good market conditions -- stocks in its market are up 9.4% in the last month. Anyone who held for that rewarding ride would probably be keen to talk about it.

Since it's been a strong week for Bet Shemesh Engines Holdings (1997) shareholders, let's have a look at trend of the longer term fundamentals.

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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 five years of share price growth, Bet Shemesh Engines Holdings (1997) moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

This free interactive report on Bet Shemesh Engines Holdings (1997)'s earnings, revenue and cash flow 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Bet Shemesh Engines Holdings (1997)'s TSR for the last 5 years was 986%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Bet Shemesh Engines Holdings (1997) has rewarded shareholders with a total shareholder return of 158% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 61%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 5 warning signs for Bet Shemesh Engines Holdings (1997) (3 don't sit too well with us) that you should be aware of.

Of course Bet Shemesh Engines Holdings (1997) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.