Recent 11% pullback isn't enough to hurt long-term Alinma Tokio Marine (TADAWUL:8312) shareholders, they're still up 95% over 3 years

By
Simply Wall St
Published
October 10, 2021
SASE:8312
Source: Shutterstock

It hasn't been the best quarter for Alinma Tokio Marine Company (TADAWUL:8312) shareholders, since the share price has fallen 21% in that time. But don't let that distract from the very nice return generated over three years. In fact, the company's share price bested the return of its market index in that time, posting a gain of 95%.

In light of the stock dropping 11% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

Check out our latest analysis for Alinma Tokio Marine

Alinma Tokio Marine wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 3 years Alinma Tokio Marine saw its revenue shrink by 8.5% per year. Despite the lack of revenue growth, the stock has returned 25%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
SASE:8312 Earnings and Revenue Growth October 11th 2021

Take a more thorough look at Alinma Tokio Marine's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Alinma Tokio Marine shareholders have received a total shareholder return of 44% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 6% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Take risks, for example - Alinma Tokio Marine has 2 warning signs (and 1 which is a bit concerning) 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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