The Hi-Tech Pipes (NSE:HITECH) Share Price Is Up 212% And Shareholders Are Boasting About It

Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Hi-Tech Pipes Limited (NSE:HITECH) share price has soared 212% in the last year. Most would be very happy with that, especially in just one year! Also pleasing for shareholders was the 80% gain in the last three months. On the other hand, longer term shareholders have had a tougher run, with the stock falling 4.3% in three years.

Check out our latest analysis for Hi-Tech Pipes

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year, Hi-Tech Pipes actually saw its earnings per share drop 17%.

Given the share price gain, we doubt the market is measuring progress with EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We doubt the modest 0.07% dividend yield is doing much to support the share price. Hi-Tech Pipes' revenue actually dropped 3.1% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Pleasingly, Hi-Tech Pipes' total shareholder return last year was 212%. And yes, that does include the dividend. This recent result is much better than the 1.3% drop suffered by shareholders each year (on average) over the last three. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. It's always interesting to track share price performance over the longer term. But to understand Hi-Tech Pipes better, we need to consider many other factors. For instance, we've identified 4 warning signs for Hi-Tech Pipes (1 is a bit unpleasant) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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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. 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.
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