Update: Mordechai Aviv Taasiot Beniyah (1973) (TLV:AVIV) Stock Gained 51% In The Last Five Years

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. Buying under-rated businesses is one path to excess returns. To wit, the Mordechai Aviv Taasiot Beniyah (1973) share price has climbed 51% in five years, easily topping the market return of 12% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 5.5% in the last year , including dividends .

Check out our latest analysis for Mordechai Aviv Taasiot Beniyah (1973)

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During five years of share price growth, Mordechai Aviv Taasiot Beniyah (1973) achieved compound earnings per share (EPS) growth of 6.2% per year. This EPS growth is slower than the share price growth of 8.5% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Mordechai Aviv Taasiot Beniyah (1973)'s earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Mordechai Aviv Taasiot Beniyah (1973), it has a TSR of 64% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Mordechai Aviv Taasiot Beniyah (1973) shareholders have received a total shareholder return of 5.5% over the last year. That's including the dividend. Having said that, the five-year TSR of 10% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. 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 instance, we've identified 5 warning signs for Mordechai Aviv Taasiot Beniyah (1973) (1 makes us a bit uncomfortable) that you should be aware of.

Of course Mordechai Aviv Taasiot Beniyah (1973) 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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