Does Kardan Israel's (TLV:KRDI) Share Price Gain of 15% Match Its Business Performance?

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. To wit, the Kardan Israel Ltd (TLV:KRDI) share price is 15% higher than it was a year ago, much better than the market decline of around 8.5% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Kardan Israel for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for Kardan Israel

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last twelve months, Kardan Israel actually shrank its EPS by 56%.

So we don't think that investors are paying too much attention to 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.

For starters, we suspect the share price has been buoyed by the dividend, which was increased during the year. It could be that the company is reaching maturity and dividend investors are buying for the yield, pushing the price up in the process.

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

If you are thinking of buying or selling Kardan Israel stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Kardan Israel shareholders have gained 15% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 11% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 6 warning signs for Kardan Israel (2 are a bit unpleasant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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