Mehadrin (TLV:MEDN) soars 12% this week, taking one-year gains to 17%

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Mehadrin Ltd (TLV:MEDN) share price is up 17% in the last 1 year, clearly besting the market decline of around 4.0% (not including dividends). So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 7.2% in three years.

Since it's been a strong week for Mehadrin shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Mehadrin

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

Over the last twelve months Mehadrin went from profitable to unprofitable. While this may prove temporary, we'd consider it a negative, so we would not have expected to see the share price up. It may be that the company has done well on other metrics.

However the year on year revenue growth of 8.1% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Mehadrin's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Mehadrin shareholders have received a total shareholder return of 17% over the last year. There's no doubt those recent returns are much better than the TSR loss of 1.7% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Mehadrin better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Mehadrin you should be aware of.

We will like Mehadrin 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 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.