MUI Properties Berhad (KLSE:MUIPROP) shareholders notch a 23% CAGR over 3 years, yet earnings have been shrinking

By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. For example, MUI Properties Berhad (KLSE:MUIPROP) shareholders have seen the share price rise 77% over three years, well in excess of the market decline (4.9%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 51% in the last year.

The past week has proven to be lucrative for MUI Properties Berhad investors, so let's see if fundamentals drove the company's three-year performance.

Our free stock report includes 2 warning signs investors should be aware of before investing in MUI Properties Berhad. Read for free now.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the last three years, MUI Properties Berhad failed to grow earnings per share, which fell 16% (annualized). This was, in part, due to extraordinary items impacting earning in the last twelve months.

This means it's unlikely the market is judging the company based on earnings growth. Given this situation, it makes sense to look at other metrics too.

You can only imagine how long term shareholders feel about the declining revenue trend (slipping at 15% per year). The only thing that's clear is there is low correlation between MUI Properties Berhad's share price and its historic fundamental data. Further research may be required!

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between MUI Properties Berhad's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. MUI Properties Berhad's TSR of 88% for the 3 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that MUI Properties Berhad shareholders have received a total shareholder return of 51% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 13% 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. It's always interesting to track share price performance over the longer term. But to understand MUI Properties Berhad better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with MUI Properties Berhad .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.

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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.