Orbit Exports (NSE:ORBTEXP) jumps 11% this week, though earnings growth is still tracking behind five-year shareholder returns

Orbit Exports Limited (NSE:ORBTEXP) shareholders might be concerned after seeing the share price drop 16% in the last quarter. But in stark contrast, the returns over the last half decade have impressed. We think most investors would be happy with the 232% return, over that period. To some, the recent pullback wouldn't be surprising after such a fast rise. The more important question is whether the stock is too cheap or too expensive today.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

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

Over half a decade, Orbit Exports managed to grow its earnings per share at 8.8% a year. This EPS growth is lower than the 27% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Orbit Exports' key metrics by checking this interactive graph of Orbit Exports's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Orbit Exports shareholders have received a total shareholder return of 9.8% over one year. Having said that, the five-year TSR of 27% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. 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. Case in point: We've spotted 1 warning sign for Orbit Exports you should be aware of.

We will like Orbit Exports better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Indian 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.