Reflecting on Tamil Nadu Newsprint and Papers' (NSE:TNPL) Share Price Returns Over The Last Three Years

While it may not be enough for some shareholders, we think it is good to see the Tamil Nadu Newsprint and Papers Limited (NSE:TNPL) share price up 20% in a single quarter. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 63%. Some might say the recent bounce is to be expected after such a bad drop. After all, could be that the fall was overdone.

View our latest analysis for Tamil Nadu Newsprint and Papers

Tamil Nadu Newsprint and Papers wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years Tamil Nadu Newsprint and Papers saw its revenue shrink by 4.7% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 18% per year. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

If you are thinking of buying or selling Tamil Nadu Newsprint and Papers stock, you should check out this FREE detailed report on its balance sheet.

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 Tamil Nadu Newsprint and Papers the TSR over the last 3 years was -59%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Investors in Tamil Nadu Newsprint and Papers had a tough year, with a total loss of 12% (including dividends), against a market gain of about 38%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Take risks, for example - Tamil Nadu Newsprint and Papers has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

We will like Tamil Nadu Newsprint and Papers 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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