Stock Analysis

Pelikan International Corporation Berhad's (KLSE:PELIKAN) three-year earnings growth trails the 70% YoY shareholder returns

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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For example, the Pelikan International Corporation Berhad (KLSE:PELIKAN) share price has soared 202% in the last three years. How nice for those who held the stock! Also pleasing for shareholders was the 81% gain in the last three months.

Since it's been a strong week for Pelikan International Corporation Berhad shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Pelikan International Corporation Berhad

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Pelikan International Corporation Berhad was able to grow its EPS at 92% per year over three years, sending the share price higher. This EPS growth is higher than the 45% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. We'd venture the lowish P/E ratio of 7.62 also reflects the negative sentiment around the stock.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

KLSE:PELIKAN Earnings Per Share Growth March 22nd 2023

Dive deeper into Pelikan International Corporation Berhad's key metrics by checking this interactive graph of Pelikan International Corporation Berhad's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Pelikan International Corporation Berhad's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Pelikan International Corporation Berhad's TSR of 391% over the last 3 years is better than the share price return.

A Different Perspective

It's good to see that Pelikan International Corporation Berhad has rewarded shareholders with a total shareholder return of 169% in the last twelve months. That gain is better than the annual TSR over five years, which is 9%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Pelikan International Corporation Berhad better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Pelikan International Corporation Berhad , and understanding them should be part of your investment process.

But note: Pelikan International Corporation 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.

Valuation is complex, but we're helping make it simple.

Find out whether Pelikan International Corporation Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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Pelikan International Corporation Berhad

Pelikan International Corporation Berhad, together with its subsidiaries, manufactures and distributes writing instruments, art, painting and hobby products, school and office stationery, and papeterie products in Malaysia, Germany, Rest of Europe, the Americas, and internationally.

Excellent balance sheet and slightly overvalued.