Hold-Key Electric Wire & Cable (TPE:1618) Has Gifted Shareholders With A Fantastic 131% Total Return On Their Investment

Passive investing in index funds can generate returns that roughly match the overall market. But you can do a lot better than that by buying good quality businesses for attractive prices. For example, the Hold-Key Electric Wire & Cable Co., Ltd (TPE:1618) share price is 93% higher than it was five years ago, which is more than the market average. We're also happy to report the stock is up a healthy 42% in the last year.

View our latest analysis for Hold-Key Electric Wire & Cable

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 last half decade, Hold-Key Electric Wire & Cable became profitable. That would generally be considered a positive, so we'd expect the share price to be up. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the Hold-Key Electric Wire & Cable share price has gained 43% in three years. Meanwhile, EPS is up 54% per year. This EPS growth is higher than the 13% average annual increase in the share price over the same three years. Therefore, it seems the market has moderated its expectations for growth, somewhat.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Hold-Key Electric Wire & Cable's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Hold-Key Electric Wire & Cable's total shareholder return (TSR) and its share price return. 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. Dividends have been really beneficial for Hold-Key Electric Wire & Cable shareholders, and that cash payout contributed to why its TSR of 131%, over the last 5 years, is better than the share price return.

A Different Perspective

It's good to see that Hold-Key Electric Wire & Cable has rewarded shareholders with a total shareholder return of 47% in the last twelve months. That's better than the annualised return of 18% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 1 warning sign for Hold-Key Electric Wire & Cable you should be aware of.

Of course Hold-Key Electric Wire & Cable may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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