Did Nova Wellness Group Berhad's (KLSE:NOVA) Share Price Deserve to Gain 79%?

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Nova Wellness Group Berhad (KLSE:NOVA) share price is up 79% in the last year, clearly besting the market return of around 2.4% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow Nova Wellness Group Berhad for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Nova Wellness Group Berhad

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Nova Wellness Group Berhad was able to grow EPS by 16% in the last twelve months. This EPS growth is significantly lower than the 79% increase in the share price. This indicates that the market is now more optimistic about the stock.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Nova Wellness Group Berhad's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Nova Wellness Group Berhad, it has a TSR of 82% for the last year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Nova Wellness Group Berhad shareholders should be happy with the total gain of 82% over the last twelve months, including dividends. Unfortunately the share price is down 5.1% over the last quarter. Shorter term share price moves often don't signify much about the business itself. It's always interesting to track share price performance over the longer term. But to understand Nova Wellness Group Berhad better, we need to consider many other factors. Even so, be aware that Nova Wellness Group Berhad is showing 2 warning signs in our investment analysis , you should know about...

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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