Earnings grew faster than the notable 59% return delivered to AWC Berhad (KLSE:AWC) shareholders over the last year

The last three months have been tough on AWC Berhad (KLSE:AWC) shareholders, who have seen the share price decline a rather worrying 36%. But looking back over the last year, the returns have actually been rather pleasing! After all, the share price is up a market-beating 58% in that time.

Although AWC Berhad has shed RM33m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for AWC Berhad

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year AWC Berhad grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We are skeptical of the suggestion that the 1.2% dividend yield would entice buyers to the stock. However the year on year revenue growth of 4.6% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We know that AWC Berhad has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling AWC Berhad stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that AWC Berhad shareholders have received a total shareholder return of 59% over the last year. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 AWC Berhad is showing 2 warning signs in our investment analysis , you should know about...

But note: AWC Berhad may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.