The NAFCO (TYO:2790) Share Price Has Gained 41% And Shareholders Are Hoping For More

It hasn't been the best quarter for NAFCO Co., Ltd. (TYO:2790) shareholders, since the share price has fallen 14% in that time. But that doesn't change the fact that the returns over the last year have been pleasing. To wit, it had solidly beat the market, up 41%.

Check out our latest analysis for NAFCO

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 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 NAFCO grew its earnings per share (EPS) by 93%. This EPS growth is significantly higher than the 41% increase in the share price. Therefore, it seems the market isn't as excited about NAFCO as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.57.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on NAFCO's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between NAFCO's total shareholder return (TSR) and its share price change, which we've covered above. 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. NAFCO's TSR of 45% for the year exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that NAFCO shareholders have received a total shareholder return of 45% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Is NAFCO cheap compared to other companies? These 3 valuation measures might help you decide.

If you are like me, then you will 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 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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