Shareholders Of Shikun & Binui (TLV:SKBN) Must Be Happy With Their 212% Total 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 on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term Shikun & Binui Ltd. (TLV:SKBN) shareholders would be well aware of this, since the stock is up 187% in five years. It's also good to see the share price up 11% over the last quarter. But this could be related to the strong market, which is up 17% in the last three months.

View our latest analysis for Shikun & Binui

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, Shikun & Binui actually saw its EPS drop 11% per year. This was, in part, due to extraordinary items impacting earning in the last twelve months.

This means it's unlikely the market is judging the company based on earnings growth. 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.

On the other hand, Shikun & Binui's revenue is growing nicely, at a compound rate of 5.9% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

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 Shikun & Binui'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 Shikun & Binui's total shareholder return (TSR) and its share price change, which we've covered above. 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. Shikun & Binui's TSR of 212% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that Shikun & Binui shareholders have received a total shareholder return of 18% over the last year. However, the TSR over five years, coming in at 26% per year, is even more impressive. 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 example, we've discovered 2 warning signs for Shikun & Binui that you should be aware of before investing here.

Of course Shikun & Binui 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 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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