Shareholders Of CTCI Advanced Systems (GTSM:5209) Must Be Happy With Their 113% Total Return

The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. But CTCI Advanced Systems Inc. (GTSM:5209) has fallen short of that second goal, with a share price rise of 58% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 24% over the last year.

View our latest analysis for CTCI Advanced Systems

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, CTCI Advanced Systems achieved compound earnings per share (EPS) growth of 9.5% per year. This EPS growth is remarkably close to the 10% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

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

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

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of CTCI Advanced Systems, it has a TSR of 113% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

CTCI Advanced Systems shareholders gained a total return of 30% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 16% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. 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. Consider risks, for instance. Every company has them, and we've spotted 5 warning signs for CTCI Advanced Systems you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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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