Stock Analysis

Did The Underlying Business Drive Episil-Precision's (TPE:3016) Lovely 387% Share Price Gain?

TWSE:3016
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Buying shares in the best businesses can build meaningful wealth for you and your family. And we've seen some truly amazing gains over the years. Just think about the savvy investors who held Episil-Precision Inc. (TPE:3016) shares for the last five years, while they gained 387%. This just goes to show the value creation that some businesses can achieve. The last week saw the share price soften some 1.7%.

See our latest analysis for Episil-Precision

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over half a decade, Episil-Precision managed to grow its earnings per share at 18% a year. This EPS growth is lower than the 37% 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.

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

earnings-per-share-growth
TSEC:3016 Earnings Per Share Growth January 1st 2021

Dive deeper into Episil-Precision's key metrics by checking this interactive graph of Episil-Precision's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Episil-Precision's TSR for the last 5 years was 406%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Episil-Precision has rewarded shareholders with a total shareholder return of 34% in the last twelve months. Of course, that includes the dividend. However, that falls short of the 38% TSR per annum it has made for shareholders, each year, over five years. You could get a better understanding of Episil-Precision's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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