Did You Miss AME Elite Consortium Berhad's (KLSE:AME) 18% Share Price Gain?

Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the AME Elite Consortium Berhad (KLSE:AME) share price is up 18% in the last year, clearly besting the market return of around 6.0% (not including dividends). So that should have shareholders smiling. AME Elite Consortium Berhad hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for AME Elite Consortium Berhad

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.

Over the last twelve months, AME Elite Consortium Berhad actually shrank its EPS by 42%.

Given the share price gain, we doubt the market is measuring progress with EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We are skeptical of the suggestion that the 1.3% dividend yield would entice buyers to the stock. However the year on year revenue growth of 8.4% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think AME Elite Consortium Berhad will earn in the future (free profit 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, AME Elite Consortium Berhad's TSR for the last year was 20%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

AME Elite Consortium Berhad boasts a total shareholder return of 20% for the last year (that includes the dividends) . We regret to report that the share price is down 1.3% over ninety days. Shorter term share price moves often don't signify much about the business itself. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that AME Elite Consortium Berhad is showing 3 warning signs in our investment analysis , you should know about...

Of course AME Elite Consortium Berhad 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 MY 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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