The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the AstraZeneca Pharma India Limited (NSE:ASTRAZEN) share price has soared 126% return in just a single year. On top of that, the share price is up 36% in about a quarter. It is also impressive that the stock is up 87% over three years, adding to the sense that it is a real winner.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).
During the last year AstraZeneca Pharma India grew its earnings per share (EPS) by 173%. It’s fair to say that the share price gain of 126% did not keep pace with the EPS growth. Therefore, it seems the market isn’t as excited about AstraZeneca Pharma India as it was before. This could be an opportunity. Having said that, the market is still optimistic, given the P/E ratio of 113.98.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on AstraZeneca Pharma India’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
We’re pleased to report that AstraZeneca Pharma India shareholders have received a total shareholder return of 126% over one year. That gain is better than the annual TSR over five years, which is 16%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of AstraZeneca Pharma India’s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.