Stock Analysis

How Much Did Matsumoto Yushi-SeiyakuLtd's(TYO:4365) Shareholders Earn From Share Price Movements Over The Last Three Years?

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For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Matsumoto Yushi-Seiyaku Co.,Ltd. (TYO:4365) shareholders, since the share price is down 24% in the last three years, falling well short of the market decline of around 4.4%. Unhappily, the share price slid 2.0% in the last week.

View our latest analysis for Matsumoto Yushi-SeiyakuLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Matsumoto Yushi-SeiyakuLtd saw its EPS decline at a compound rate of 17% per year, over the last three years. In comparison the 9% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

JASDAQ:4365 Earnings Per Share Growth February 1st 2021

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Matsumoto Yushi-SeiyakuLtd's TSR for the last 3 years was -17%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Investors in Matsumoto Yushi-SeiyakuLtd had a tough year, with a total loss of 16% (including dividends), against a market gain of about 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Keeping this in mind, a solid next step might be to take a look at Matsumoto Yushi-SeiyakuLtd's dividend track record. This free interactive graph is a great place to start.

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 JP exchanges.

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About TSE:4365

Matsumoto Yushi-SeiyakuLtd

Matsumoto Yushi-Seiyaku Co.,Ltd. manufactures and markets fiber and textile chemicals, microcapsules, various surfactants, and high polymer based products in Japan and Indonesia.

Flawless balance sheet with solid track record and pays a dividend.

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