Would Shareholders Who Purchased Unichem Laboratories'(NSE:UNICHEMLAB) Stock Three Years Be Happy With The Share price Today?

While it may not be enough for some shareholders, we think it is good to see the Unichem Laboratories Limited (NSE:UNICHEMLAB) share price up 19% in a single quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 31% in the last three years, significantly under-performing the market.

See our latest analysis for Unichem Laboratories

Given that Unichem Laboratories didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last three years, Unichem Laboratories saw its revenue grow by 10% per year, compound. That's a pretty good rate of top-line growth. Shareholders have endured a share price decline of 9.4% per year. This implies the market had higher expectations of Unichem Laboratories. With revenue growing at a solid clip, now might be the time to focus on the possibility that it will have a brighter future.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Unichem Laboratories' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Unichem Laboratories' TSR for the last 3 years was -28%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Unichem Laboratories has rewarded shareholders with a total shareholder return of 7.7% in the last twelve months. Of course, that includes the dividend. That certainly beats the loss of about 4.2% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Unichem Laboratories (of which 1 is a bit unpleasant!) you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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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