Stock Analysis

FoundPac Group Berhad (KLSE:FPGROUP) Has Gifted Shareholders With A Fantastic 206% Total Return On Their Investment

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KLSE:FPGROUP
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FoundPac Group Berhad (KLSE:FPGROUP) shareholders might be concerned after seeing the share price drop 15% in the last quarter. In contrast, the return over three years has been impressive. In three years the stock price has launched 179% higher: a great result. So the recent fall in the share price should be viewed in that context. The fundamental business performance will ultimately dictate whether the top is in, or if this is a stellar buying opportunity.

View our latest analysis for FoundPac Group 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 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.

FoundPac Group Berhad was able to grow its EPS at 6.6% per year over three years, sending the share price higher. In comparison, the 41% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. That's not necessarily surprising considering the three-year track record of earnings growth.

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

earnings-per-share-growth
KLSE:FPGROUP Earnings Per Share Growth March 15th 2021

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

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for FoundPac Group Berhad the TSR over the last 3 years was 206%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

FoundPac Group Berhad shareholders have gained 33% over twelve months (even including dividends). This isn't far from the market return of 31%. Notably, the longer term shareholders are better off with their TSR of 45% per year over the last three years. In the best case scenario the share price is simply plateauing while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand FoundPac Group Berhad better, we need to consider many other factors. For example, we've discovered 1 warning sign for FoundPac Group Berhad 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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