Stock Analysis

Shareholders Of John B. Sanfilippo & Son (NASDAQ:JBSS) Must Be Happy With Their 85% Return

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NasdaqGS:JBSS
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One simple way to benefit from the stock market is to buy an index fund. But many of us dare to dream of bigger returns, and build a portfolio ourselves. Just take a look at John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), which is up 59%, over three years, soundly beating the market return of 47% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 28% in the last year , including dividends .

See our latest analysis for John B. Sanfilippo & Son

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

John B. Sanfilippo & Son was able to grow its EPS at 21% per year over three years, sending the share price higher. The average annual share price increase of 17% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
NasdaqGS:JBSS Earnings Per Share Growth March 17th 2021

It might be well worthwhile taking a look at our free report on John B. Sanfilippo & Son'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 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, John B. Sanfilippo & Son's TSR for the last 3 years was 85%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

John B. Sanfilippo & Son shareholders gained a total return of 28% 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 12% over half a decade This could indicate that the company is winning over new investors, as it pursues its 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 John B. Sanfilippo & Son is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...

But note: John B. Sanfilippo & Son may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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What are the risks and opportunities for John B. Sanfilippo & Son?

John B. Sanfilippo & Son, Inc., through its subsidiary, JBSS Ventures, LLC, processes and distributes tree nuts and peanuts in the United States.

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Rewards

  • Price-To-Earnings ratio (16.2x) is below the Food industry average (17.9x)

Risks

  • Significant insider selling over the past 3 months

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