Did You Participate In Any Of Formosa Sumco Technology's (TPE:3532) Fantastic 173% Return ?

When you buy a stock there is always a possibility that it could drop 100%. But on a lighter note, a good company can see its share price rise well over 100%. For instance, the price of Formosa Sumco Technology Corporation (TPE:3532) stock is up an impressive 118% over the last five years. It's also good to see the share price up 27% over the last quarter. But this could be related to the strong market, which is up 17% in the last three months.

View our latest analysis for Formosa Sumco Technology

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Formosa Sumco Technology's earnings per share are down 4.6% per year, despite strong share price performance over five years.

By glancing at these numbers, we'd posit that the decline in earnings per share is not representative of how the business has changed over the years. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

In contrast revenue growth of 4.7% per year is probably viewed as evidence that Formosa Sumco Technology is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Formosa Sumco Technology's TSR for the last 5 years was 173%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Formosa Sumco Technology provided a TSR of 26% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 22% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Formosa Sumco Technology better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Formosa Sumco Technology (including 1 which is a bit unpleasant) .

We will like Formosa Sumco Technology 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 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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