Shareholders of Prashkovsky Investments and Construction (TLV:PRSK) Must Be Delighted With Their 955% Total Return

By
Simply Wall St
Published
March 09, 2021
TASE:PRSK
Source: Shutterstock

Buying shares in the best businesses can build meaningful wealth for you and your family. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the Prashkovsky Investments and Construction Ltd. (TLV:PRSK) share price has soared 708% over five years. If that doesn't get you thinking about long term investing, we don't know what will.

It really delights us to see such great share price performance for investors.

View our latest analysis for Prashkovsky Investments and Construction

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During five years of share price growth, Prashkovsky Investments and Construction achieved compound earnings per share (EPS) growth of 48% per year. So the EPS growth rate is rather close to the annualized share price gain of 52% per year. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price has approximately tracked EPS growth.

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

earnings-per-share-growth
TASE:PRSK Earnings Per Share Growth March 10th 2021

Dive deeper into Prashkovsky Investments and Construction's key metrics by checking this interactive graph of Prashkovsky Investments and Construction'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. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Prashkovsky Investments and Construction's TSR for the last 5 years was 955%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Prashkovsky Investments and Construction shareholders have received a total shareholder return of 67% over one year. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 60%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. To that end, you should learn about the 4 warning signs we've spotted with Prashkovsky Investments and Construction (including 2 which are potentially serious) .

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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