Introducing Prime Securities (NSE:PRIMESECU), The Stock That Rocketed 1029% In The Last Five Years

By
Simply Wall St
Published
March 14, 2019
NSEI:PRIMESECU

Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. For example, the Prime Securities Limited (NSE:PRIMESECU) share price is up a whopping 1029% in the last half decade, a handsome return for long term holders. And this is just one example of the epic gains achieved by some long term investors. Meanwhile the share price is 4.1% higher than it was a week ago.

We love happy stories like this one. The company should be really proud of that performance!

Check out our latest analysis for Prime Securities

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the last half decade, Prime Securities became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the Prime Securities share price has gained 1014% in three years. During the same period, EPS grew by 1.5% each year. This EPS growth is lower than the 123% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

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

NSEI:PRIMESECU Past and Future Earnings, March 14th 2019
NSEI:PRIMESECU Past and Future Earnings, March 14th 2019

It might be well worthwhile taking a look at our freereport on Prime Securities's earnings, revenue and cash flow.

A Different Perspective

Investors in Prime Securities had a tough year, with a total loss of 1.3%, against a market gain of about 0.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 62% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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