Did Business Growth add Page Industries (NSE: PAGEIND) share price 121%?

The maximum amount you can lose on a stock (assuming you don’t use leverage) is 100% of your money. On the plus side, if you buy stocks in a quality company at the right price, you can win well over 100%. Long term Industries Limited (NSE: PAGEIND) Shareholders should be aware, as the stock is up 121% in five years. It’s down 2.6% in the past seven days.

Check out our latest analysis for Page Industries

While the efficient markets hypothesis continues to be taught by some, it has been shown that markets are overreactive dynamic systems and investors are not always rational. One way to study how market sentiment has changed over time is to examine the interaction between a company’s stock price and its earnings per share (EPS).

During the five years of rising stock prices, Page Industries achieved total earnings per share (EPS) growth of 8.0% per annum. This EPS growth is slower than the share price growth of 17% per year over the same period. This suggests that market participants value the company more highly these days. Given its five-year track record of earnings growth, that’s not necessarily surprising. This optimism is evident in its relatively high P / E of 98.97.

The picture below shows how EPS has evolved over time (you can click on the picture to see more details).

NSEI: PAGEIND earnings growth per share June 11, 2021

Before buying or selling any stock, we always recommend taking a close look at the historical growth trends available here.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and stock price return. While the stock price return only reflects the change in the stock price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of discounted capital raising or spin-off. So, for companies that pay a generous dividend, the TSR is often much higher than the stock price return. In the case of Page Industries, it has a TSR of 131% over the past 5 years. That exceeds the already mentioned share price return. The dividends paid by the company have increased the total shareholder return.

Another perspective

Page Industries’ TSR for the year was broadly in line with the market at 64%. That profit looks pretty satisfactory and is even better than the 5 year TSR of 18% per year. It is possible that management’s foresight will bring growth far into the future, even if the stock price slows. I find it very interesting to look at the share price as a proxy for business development over the long term. But to really gain insight we need to consider other information as well. For example, consider the ubiquitous specter of investment risk. We identified 1 warning sign with Page Industries, and understanding them should be part of your investment process.

Naturally, You could find a fantastic investment by looking elsewhere. So check this out free List of companies that we expect will increase their profits.

Please note that the market returns reported in this article reflect the market weighted average returns on stocks currently traded on IN exchanges.

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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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