Did You Participate In Any Of Moscow City Telephone Network's (MCX:MGTS) Incredible 774% Return?

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held Public Joint Stock Company Moscow City Telephone Network (MCX:MGTS) shares for the last five years, while they gained 360%. And this is just one example of the epic gains achieved by some long term investors. And in the last month, the share price has gained 4.1%. But the price may well have benefitted from a buoyant market, since stocks have gained 15% in the last thirty days.

View our latest analysis for Moscow City Telephone Network

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 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).

During the five years of share price growth, Moscow City Telephone Network moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Moscow City Telephone Network's total shareholder return (TSR) and its share price change, which we've covered above. 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. Moscow City Telephone Network's TSR of 774% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that Moscow City Telephone Network shareholders have received a total shareholder return of 20% over one year. However, the TSR over five years, coming in at 54% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Moscow City Telephone Network better, we need to consider many other factors. Even so, be aware that Moscow City Telephone Network is showing 2 warning signs in our investment analysis , you should know about...

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