Bliss GVS Pharma’s (NSE:BLISSGVS) 37% CAGR outpaced the company’s earnings growth over the same three-year period
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Bliss GVS Pharma Limited (NSE:BLISSGVS) share price has soared 155% in the last three years. Most would be happy with that. Also pleasing for shareholders was the 20% gain in the last three months.
Since it’s been a strong week for Bliss GVS Pharma shareholders, let’s have a look at trend of the longer term fundamentals.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.
During three years of share price growth, Bliss GVS Pharma achieved compound earnings per share growth of 128% per year. The average annual share price increase of 37% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Bliss GVS Pharma’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Bliss GVS Pharma’s TSR for the last 3 years was 159%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Bliss GVS Pharma shareholders gained a total return of 3.1% during the year. But that return falls short of the market. But at least that’s still a gain! Over five years the TSR has been a reduction of 1.7% per year, over five years. It could well be that the business is stabilizing. It’s always interesting to track share price performance over the longer term. But to understand Bliss GVS Pharma better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Bliss GVS Pharma , and understanding them should be part of your investment process.
Bliss GVS Pharma is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.
Valuation is complex, but we’re here to simplify it.
Discover if Bliss GVS Pharma might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
