Introducing ABG Sundal Collier Holding (OB:ABG), A Stock That Climbed 71% In The Last Year

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the ABG Sundal Collier Holding ASA (OB:ABG) share price is 71% higher than it was a year ago, much better than the market return of around 5.1% (not including dividends) in the same period. So that should have shareholders smiling. Having said that, the longer term returns aren't so impressive, with stock gaining just 9.2% in three years.

View our latest analysis for ABG Sundal Collier Holding

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.

ABG Sundal Collier Holding was able to grow EPS by 86% in the last twelve months. It's fair to say that the share price gain of 71% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about ABG Sundal Collier Holding as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.64.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on ABG Sundal Collier Holding'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. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, ABG Sundal Collier Holding's TSR for the last year was 86%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that ABG Sundal Collier Holding has rewarded shareholders with a total shareholder return of 86% in the last twelve months. And that does include the dividend. 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. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand ABG Sundal Collier Holding better, we need to consider many other factors. Even so, be aware that ABG Sundal Collier Holding is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

ABG Sundal Collier Holding is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NO 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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