Shareholders of NOTE (STO:NOTE) Must Be Delighted With Their 631% Total Return

Buying shares in the best businesses can build meaningful wealth for you and your family. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held NOTE AB (publ) (STO:NOTE) shares for the last five years, while they gained 526%. This just goes to show the value creation that some businesses can achieve. On top of that, the share price is up 23% in about a quarter. But this could be related to the strong market, which is up 9.5% in the last three months.

It really delights us to see such great share price performance for investors.

See our latest analysis for NOTE

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 five years of share price growth, NOTE achieved compound earnings per share (EPS) growth of 28% per year. This EPS growth is lower than the 44% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. 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).

It might be well worthwhile taking a look at our free report on NOTE's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered NOTE's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. NOTE's TSR of 631% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that NOTE shareholders have received a total shareholder return of 44% over the last year. Having said that, the five-year TSR of 49% a year, is even better. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

We will like NOTE better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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