Introducing Arabian Shield Cooperative Insurance (TADAWUL:8070), A Stock That Climbed 98% In The Last Five Years

When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, the Arabian Shield Cooperative Insurance Company (TADAWUL:8070) share price is up 98% in the last 5 years, clearly besting the market return of around 56% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 54% in the last year.

View our latest analysis for Arabian Shield Cooperative Insurance

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 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).

Over half a decade, Arabian Shield Cooperative Insurance managed to grow its earnings per share at 10% a year. This EPS growth is slower than the share price growth of 15% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

This free interactive report on Arabian Shield Cooperative Insurance's 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 Arabian Shield Cooperative Insurance shareholders have received a total shareholder return of 54% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% 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 Arabian Shield Cooperative Insurance better, we need to consider many other factors. Take risks, for example - Arabian Shield Cooperative Insurance has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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 SA 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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