Update: NACL Industries (NSE:NACLIND) Stock Gained 64% In The Last Year

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. For example, the NACL Industries Limited (NSE:NACLIND) share price is up 64% in the last year, clearly besting the market return of around 19% (not including dividends). That's a solid performance by our standards! Zooming out, the stock is actually down 30% in the last three years.

See our latest analysis for NACL Industries

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 NACL Industries grew its earnings per share, moving from a loss to a profit.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

We are skeptical of the suggestion that the 0.2% dividend yield would entice buyers to the stock. However the year on year revenue growth of 29% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at NACL Industries' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that NACL Industries rewarded shareholders with a total shareholder return of 65% over the last year. That includes the value of the dividend. This recent result is much better than the 9% drop suffered by shareholders each year (on average) over the last three. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. It's always interesting to track share price performance over the longer term. But to understand NACL Industries better, we need to consider many other factors. Take risks, for example - NACL Industries has 4 warning signs (and 1 which is concerning) we think 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 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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