Did You Participate In Any Of Taiwan Navigation's (TPE:2617) Respectable 50% Return?

It might be of some concern to shareholders to see the Taiwan Navigation Co., Ltd. (TPE:2617) share price down 12% in the last month. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 27%, less than the market return of 124%.

View our latest analysis for Taiwan Navigation

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 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 five years of share price growth, Taiwan Navigation achieved compound earnings per share (EPS) growth of 21% per year. This EPS growth is higher than the 5% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

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

Dive deeper into Taiwan Navigation's key metrics by checking this interactive graph of Taiwan Navigation'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. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Taiwan Navigation's TSR for the last 5 years was 50%, 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

Taiwan Navigation shareholders are up 14% for the year (even including dividends). Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 9% per year over five year. This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Taiwan Navigation better, we need to consider many other factors. Even so, be aware that Taiwan Navigation is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

We will like Taiwan Navigation 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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