Whirlpool of India (NSE:WHIRLPOOL) shareholders have earned a 6.0% CAGR over the last five years

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the Whirlpool of India Limited (NSE:WHIRLPOOL) share price is up 32% in the last five years, that's less than the market return. However, more recent buyers should be happy with the increase of 25% over the last year.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for Whirlpool of India

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.

Whirlpool of India's earnings per share are down 8.2% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

The modest 0.2% dividend yield is unlikely to be propping up the share price. On the other hand, Whirlpool of India's revenue is growing nicely, at a compound rate of 5.0% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Whirlpool of India has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Whirlpool of India stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Whirlpool of India provided a TSR of 25% over the last twelve months. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 6% per year over five year. It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Whirlpool of India better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Whirlpool of India .

We will like Whirlpool of India 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.