If You Had Bought Isramco Negev 2 Limited Partnership (TLV:ISRA.L) Shares Five Years Ago You'd Have A Total Return Of Negative 32%

For many, the main point of investing is to generate higher returns than the overall market. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in Isramco Negev 2 Limited Partnership (TLV:ISRA.L), since the last five years saw the share price fall 79%. In contrast, the stock price has popped 8.5% in the last thirty days.

Check out our latest analysis for Isramco Negev 2 Limited Partnership

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

While the share price declined over five years, Isramco Negev 2 Limited Partnership actually managed to increase EPS by an average of 4.8% per year. So it doesn't seem like EPS is a great guide to understanding how the market is valuing the stock. Alternatively, growth expectations may have been unreasonable in the past.

Based on these numbers, we'd venture that the market may have been over-optimistic about forecast growth, half a decade ago. Having said that, we might get a better idea of what's going on with the stock by looking at other metrics.

In contrast to the share price, revenue has actually increased by 1.5% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What about the Total Shareholder Return (TSR)?

We've already covered Isramco Negev 2 Limited Partnership's share price action, but we should also mention its total shareholder return (TSR). 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. Dividends have been really beneficial for Isramco Negev 2 Limited Partnership shareholders, and that cash payout explains why its total shareholder loss of 32%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

It's good to see that Isramco Negev 2 Limited Partnership has rewarded shareholders with a total shareholder return of 94% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 6% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Isramco Negev 2 Limited Partnership better, we need to consider many other factors. Take risks, for example - Isramco Negev 2 Limited Partnership has 1 warning sign we think you should be aware of.

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 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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