ES Ceramics Technology Berhad's (KLSE:ESCERAM) Wonderful 433% Share Price Increase Shows How Capitalism Can Build Wealth

ES Ceramics Technology Berhad (KLSE:ESCERAM) shareholders have seen the share price descend 27% over the month. But that doesn't change the fact that the returns over the last year have been spectacular. Indeed, the share price is up a whopping 433% in that time. So it is not that surprising to see the stock retrace a little. Only time will tell if there is still too much optimism currently reflected in the share price.

View our latest analysis for ES Ceramics Technology Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

ES Ceramics Technology Berhad was able to grow EPS by 216% in the last twelve months. The share price gain of 433% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock. The fairly generous P/E ratio of 48.44 also points to this optimism.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for ES Ceramics Technology Berhad the TSR over the last year was 439%, 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

We're pleased to report that ES Ceramics Technology Berhad shareholders have received a total shareholder return of 439% over one year. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 23% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 ES Ceramics Technology Berhad is showing 4 warning signs in our investment analysis , and 1 of those is a bit concerning...

But note: ES Ceramics Technology 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 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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