Bumi Armada Berhad (KLSE:ARMADA) pulls back 7.5% this week, but still delivers shareholders impressive 22% CAGR over 5 years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the Bumi Armada Berhad (KLSE:ARMADA) share price has soared 175% in the last half decade. Most would be very happy with that. In the last week shares have slid back 7.5%.

While the stock has fallen 7.5% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Bumi Armada Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Bumi Armada Berhad moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

We know that Bumi Armada Berhad has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Bumi Armada Berhad stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Bumi Armada Berhad shareholders have received returns of 5.3% over twelve months, which isn't far from the general market return. We should note here that the five-year TSR is more impressive, at 22% per year. Although the share price growth has slowed, the longer term story points to a business well worth watching. 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. For example, we've discovered 1 warning sign for Bumi Armada Berhad that you should be aware of before investing here.

Of course Bumi Armada 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 Malaysian exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.