Did You Participate In Any Of Sree Rayalaseema Hi-Strength Hypo's (NSE:SRHHYPOLTD) Fantastic 261% Return ?

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 Sree Rayalaseema Hi-Strength Hypo Limited (NSE:SRHHYPOLTD) shareholders would be well aware of this, since the stock is up 238% in five years. Also pleasing for shareholders was the 44% gain in the last three months. But this move may well have been assisted by the reasonably buoyant market (up 20% in 90 days).

See our latest analysis for Sree Rayalaseema Hi-Strength Hypo

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, Sree Rayalaseema Hi-Strength Hypo achieved compound earnings per share (EPS) growth of 21% per year. This EPS growth is lower than the 28% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Sree Rayalaseema Hi-Strength Hypo the TSR over the last 5 years was 261%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Sree Rayalaseema Hi-Strength Hypo has rewarded shareholders with a total shareholder return of 135% in the last twelve months. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 29% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Sree Rayalaseema Hi-Strength Hypo better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Sree Rayalaseema Hi-Strength Hypo you should be aware of.

We will like Sree Rayalaseema Hi-Strength Hypo 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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