If You Had Bought Neogen Chemicals (NSE:NEOGEN) Shares A Year Ago You'd Have Earned 70% Returns

It hasn't been the best quarter for Neogen Chemicals Limited (NSE:NEOGEN) shareholders, since the share price has fallen 15% in that time. But looking back over the last year, the returns have actually been rather pleasing! After all, the share price is up a market-beating 70% in that time.

Check out our latest analysis for Neogen Chemicals

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 Neogen Chemicals grew its earnings per share (EPS) by 3.8%. The share price gain of 70% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 50.46.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Neogen Chemicals' earnings, revenue and cash flow.

A Different Perspective

Neogen Chemicals shareholders should be happy with the total gain of 71% over the last twelve months, including dividends. We regret to report that the share price is down 15% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Neogen Chemicals (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

We will like Neogen Chemicals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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