Recent 11% pullback isn't enough to hurt long-term Kamat Hotels (India) (NSE:KAMATHOTEL) shareholders, they're still up 712% over 3 years

Kamat Hotels (India) Limited (NSE:KAMATHOTEL) shareholders have seen the share price descend 18% over the month. But that doesn't displace its brilliant performance over three years. Indeed, the share price is up a whopping 712% in that time. Arguably, the recent fall is to be expected after such a strong rise. The share price action could signify that the business itself is dramatically improved, in that time. It really delights us to see such great share price performance for investors.

Since the long term performance has been good but there's been a recent pullback of 11%, let's check if the fundamentals match the share price.

Check out our latest analysis for Kamat Hotels (India)

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, Kamat Hotels (India) moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Kamat Hotels (India)'s key metrics by checking this interactive graph of Kamat Hotels (India)'s earnings, revenue and cash flow.

A Different Perspective

Kamat Hotels (India) shareholders have received returns of 46% over twelve months, which isn't far from the general market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 43%. It is possible that management foresight will bring growth well into the future, even if the share price slows down. 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. Take risks, for example - Kamat Hotels (India) has 5 warning signs (and 1 which shouldn't be ignored) we think you should know about.

We will like Kamat Hotels (India) 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 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.