The No.1Ltd (TYO:3562) Share Price Has Gained 235%, So Why Not Pay It Some Attention?

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. For instance the No.1 Co.,Ltd (TYO:3562) share price is 235% higher than it was three years ago. Most would be happy with that. It's down 1.8% in the last seven days.

Check out our latest analysis for No.1Ltd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

No.1Ltd was able to grow its EPS at 14% per year over three years, sending the share price higher. This EPS growth is lower than the 50% average annual increase in the share price. This indicates that the market is feeling more optimistic on the stock, after the last few years of progress. That's not necessarily surprising considering the three-year track record of earnings growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into No.1Ltd's key metrics by checking this interactive graph of No.1Ltd's earnings, revenue and cash flow.

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 No.1Ltd the TSR over the last 3 years was 254%, 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

We're pleased to report that No.1Ltd rewarded shareholders with a total shareholder return of 155% over the last year. And yes, that does include the dividend. That's better than the annualized TSR of 52% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand No.1Ltd better, we need to consider many other factors. For example, we've discovered 3 warning signs for No.1Ltd (1 is a bit unpleasant!) that you should be aware of before investing here.

Of course No.1Ltd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on JP 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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