Did You Participate In Any Of Fuji Glass' (TYO:5212) Incredible 729% Return?

We think all investors should try to buy and hold high quality multi-year winners. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Fuji Glass Co., Ltd. (TYO:5212) shares for the last five years, while they gained 649%. And this is just one example of the epic gains achieved by some long term investors. It's also good to see the share price up 193% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

We love happy stories like this one. The company should be really proud of that performance!

See our latest analysis for Fuji Glass

We don't think that Fuji Glass' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last 5 years Fuji Glass saw its revenue shrink by 2.5% per year. This is in stark contrast to the strong share price growth of 50%, compound, per year. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. I think it's fair to say there is probably a fair bit of excitement in the price.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Fuji Glass' financial health with this free report on its balance sheet.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Fuji Glass the TSR over the last 5 years was 729%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Fuji Glass shareholders have received a total shareholder return of 499% over the last year. That's including the dividend. That's better than the annualised return of 53% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Fuji Glass better, we need to consider many other factors. For example, we've discovered 4 warning signs for Fuji Glass (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course Fuji Glass 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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