Imagine Holding GFM Services Berhad (KLSE:GFM) Shares While The Price Zoomed 400% Higher

While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. While not every stock performs well, when investors win, they can win big. For example, GFM Services Berhad (KLSE:GFM) has generated a beautiful 400% return in just a single year. In more good news, the share price has risen 38% in thirty days. We note that GFM Services Berhad reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report. In contrast, the longer term returns are negative, since the share price is 17% lower than it was three years ago.

View our latest analysis for GFM Services Berhad

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

GFM Services Berhad was able to grow EPS by 35% in the last twelve months. The share price gain of 400% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

This free interactive report on GFM Services Berhad's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, GFM Services Berhad's TSR for the last year was 405%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that GFM Services Berhad rewarded shareholders with a total shareholder return of 405% over the last year. That includes the value of the dividend. This recent result is much better than the 4% drop suffered by shareholders each year (on average) over the last three. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. It's always interesting to track share price performance over the longer term. But to understand GFM Services Berhad better, we need to consider many other factors. For example, we've discovered 5 warning signs for GFM Services Berhad (2 are concerning!) that you should be aware of before investing here.

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 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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