If You Had Bought Movie Games (WSE:MOV) Shares A Year Ago You'd Have Earned 222% Returns

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Movie Games S.A. (WSE:MOV) share price has soared 222% in the last year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 15% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 13% in 90 days). Movie Games hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Movie Games

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.

During the last year Movie Games saw its earnings per share (EPS) increase strongly. While that particular rate of growth is unlikely to be sustained for long, it is still remarkable. We are not surprised the share price is up. To us, inflection points like this are the best time to take a close look at a stock.

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

This free interactive report on Movie Games' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Movie Games shareholders have gained 223% over the last year. That's better than the more recent three month gain of 15%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Movie Games is showing 4 warning signs in our investment analysis , and 1 of those is potentially serious...

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 PL 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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