Recent 5.9% pullback isn't enough to hurt long-term Religare Enterprises (NSE:RELIGARE) shareholders, they're still up 515% over 5 years

Buying shares in the best businesses can build meaningful wealth for you and your family. While not every stock performs well, when investors win, they can win big. To wit, the Religare Enterprises Limited (NSE:RELIGARE) share price has soared 515% over five years. And this is just one example of the epic gains achieved by some long term investors. On the other hand, we note it's down 9.6% in about a month. This could be related to the soft market, with stocks down around 0.2% in the last month. Anyone who held for that rewarding ride would probably be keen to talk about it.

In light of the stock dropping 5.9% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

See our latest analysis for Religare Enterprises

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the five years of share price growth, Religare Enterprises 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 graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Religare Enterprises' earnings, revenue and cash flow.

A Different Perspective

It's good to see that Religare Enterprises has rewarded shareholders with a total shareholder return of 16% in the last twelve months. Having said that, the five-year TSR of 44% 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. It's always interesting to track share price performance over the longer term. But to understand Religare Enterprises better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Religare Enterprises (of which 1 is a bit concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.