Jay Shree Tea & Industries (NSE:JAYSREETEA) rallies 17% this week, taking five-year gains to 220%

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For example, the Jay Shree Tea & Industries Limited (NSE:JAYSREETEA) share price has soared 220% in the last half decade. Most would be very happy with that. Also pleasing for shareholders was the 36% gain in the last three months.

The past week has proven to be lucrative for Jay Shree Tea & Industries investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Jay Shree Tea & Industries

Jay Shree Tea & Industries wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Jay Shree Tea & Industries can boast revenue growth at a rate of 0.4% per year. That's not a very high growth rate considering the bottom line. So we wouldn't have expected to see the share price to have lifted 26% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about Jay Shree Tea & Industries.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Jay Shree Tea & Industries stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Jay Shree Tea & Industries' TSR for the year was broadly in line with the market average, at 46%. That gain looks pretty satisfying, and it is even better than the five-year TSR of 26% per year. It is possible that management foresight will bring growth well into the future, even if the share price slows down. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Jay Shree Tea & Industries (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.