Mediterranean and Gulf Cooperative Insurance and Reinsurance (TADAWUL:8030) rises 7.4% this week, taking one-year gains to 145%

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the The Mediterranean and Gulf Cooperative Insurance and Reinsurance Company (TADAWUL:8030) share price has soared 145% in the last 1 year. Most would be very happy with that, especially in just one year! It's also good to see the share price up 16% over the last quarter. However, the longer term returns haven't been so impressive, with the stock up just 19% in the last three years.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

View our latest analysis for Mediterranean and Gulf Cooperative Insurance and Reinsurance

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).

Mediterranean and Gulf Cooperative Insurance and Reinsurance went from making a loss to reporting a profit, in the last year.

The result looks like a strong improvement to us, so we're not surprised the market likes the growth. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.

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

Dive deeper into Mediterranean and Gulf Cooperative Insurance and Reinsurance's key metrics by checking this interactive graph of Mediterranean and Gulf Cooperative Insurance and Reinsurance's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Mediterranean and Gulf Cooperative Insurance and Reinsurance shareholders have received a total shareholder return of 145% over the last year. That's better than the annualised return of 15% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Mediterranean and Gulf Cooperative Insurance and Reinsurance you should know about.

But note: Mediterranean and Gulf Cooperative Insurance and Reinsurance may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com