If You Had Bought Gujarat Pipavav Port (NSE:GPPL) Stock A Year Ago, You Could Pocket A 38% Gain Today

Diversification is a key tool for dealing with stock price volatility. But the goal is to pick stocks that do better than average. One such company is Gujarat Pipavav Port Limited (NSE:GPPL), which saw its share price increase 38% in the last year, slightly above the market return of around 33% (not including dividends). In contrast, the longer term returns are negative, since the share price is 30% lower than it was three years ago.

View our latest analysis for Gujarat Pipavav Port

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year, Gujarat Pipavav Port actually saw its earnings per share drop 35%.

This means it's unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We haven't seen Gujarat Pipavav Port increase dividend payments yet, so the yield probably hasn't helped drive the share higher. It saw it's revenue decline by 6.8% over twelve months. Usually that correlates with a lower share price, but let's face it, the gyrations of the market are sometimes only as clear as mud.

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

If you are thinking of buying or selling Gujarat Pipavav Port stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Gujarat Pipavav Port, it has a TSR of 48% for the last year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Gujarat Pipavav Port shareholders have received a total shareholder return of 48% over the last year. Of course, that includes the dividend. There's no doubt those recent returns are much better than the TSR loss of 4% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Gujarat Pipavav Port better, we need to consider many other factors. For instance, we've identified 2 warning signs for Gujarat Pipavav Port that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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