Introducing C.I. MedicalLtd (TYO:3540), The Stock That Zoomed 114% In The Last Year

While C.I. Medical Co.,Ltd. (TYO:3540) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 10% in the last quarter. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 114%. So it is important to view the recent reduction in price through that lense. The real question is whether the business is trending in the right direction.

See our latest analysis for C.I. MedicalLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

C.I. MedicalLtd was able to grow EPS by 94% in the last twelve months. We note that the earnings per share growth isn't far from the share price growth (of 114%). This makes us think the market hasn't really changed its sentiment around the company, in the last year. We don't think its coincidental that the share price is growing at a similar rate to the earnings per share.

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

We know that C.I. MedicalLtd has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, C.I. MedicalLtd's TSR for the last year was 117%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Pleasingly, C.I. MedicalLtd's total shareholder return last year was 117%. And yes, that does include the dividend. What is absolutely clear is that is far preferable to the dismal 12% average annual loss suffered over the last three years. It could well be that the business has turned around -- or else regained the confidence of investors. It's always interesting to track share price performance over the longer term. But to understand C.I. MedicalLtd better, we need to consider many other factors. Take risks, for example - C.I. MedicalLtd has 1 warning sign we think you should be aware of.

Of course C.I. MedicalLtd 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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