Announcing: Asia Electronic Material (GTSM:4939) Stock Increased An Energizing 186% In The Last Five Years

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Asia Electronic Material Co., Ltd. (GTSM:4939) shareholders would be well aware of this, since the stock is up 186% in five years. It's also good to see the share price up 36% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 17% in 90 days).

See our latest analysis for Asia Electronic Material

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 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.

During the last half decade, Asia Electronic Material became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Asia Electronic Material the TSR over the last 5 years was 206%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Asia Electronic Material provided a TSR of 21% over the last twelve months. But that was short of the market average. On the bright side, the longer term returns (running at about 25% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Asia Electronic Material is showing 3 warning signs in our investment analysis , you should know about...

Of course Asia Electronic Material 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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