Discount Investment (TLV:DISI) Has Gifted Shareholders With A Fantastic 131% Total Return On Their Investment

The simplest way to invest in stocks is to buy exchange traded funds. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the Discount Investment Corporation Ltd. (TLV:DISI) share price is 66% higher than it was five years ago, which is more than the market average. It's also good to see a healthy gain of 50% in the last year.

View our latest analysis for Discount Investment

Given that Discount Investment didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last half decade Discount Investment's revenue has actually been trending down at about 32% per year. Despite the lack of revenue growth, the stock has returned a respectable 11%, compound, over that time. To us that suggests that there probably isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

What about the Total Shareholder Return (TSR)?

We've already covered Discount Investment's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Discount Investment shareholders, and that cash payout contributed to why its TSR of 131%, over the last 5 years, is better than the share price return.

A Different Perspective

It's nice to see that Discount Investment shareholders have received a total shareholder return of 50% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Discount Investment better, we need to consider many other factors. Even so, be aware that Discount Investment is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

We will like Discount Investment better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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