Is Jayant Agro-Organics' (NSE:JAYAGROGN) 168% Share Price Increase Well Justified?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Jayant Agro-Organics Limited (NSE:JAYAGROGN) shareholders would be well aware of this, since the stock is up 168% in five years. On top of that, the share price is up 49% in about a quarter. But this could be related to the strong market, which is up 23% in the last three months.

Check out our latest analysis for Jayant Agro-Organics

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).

Jayant Agro-Organics' earnings per share are down 22% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

In contrast revenue growth of 11% per year is probably viewed as evidence that Jayant Agro-Organics is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

We've already covered Jayant Agro-Organics' share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Jayant Agro-Organics' TSR of 181% over the last 5 years is better than the share price return.

A Different Perspective

Jayant Agro-Organics provided a TSR of 23% over the year. That's fairly close to the broader market return. We should note here that the five-year TSR is more impressive, at 23% per year. Although the share price growth has slowed, the longer term story points to a business well worth watching. It's always interesting to track share price performance over the longer term. But to understand Jayant Agro-Organics better, we need to consider many other factors. Even so, be aware that Jayant Agro-Organics is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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