The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the discoverIE Group plc (LON:DSCV) share price has flown 102% in the last three years. Most would be happy with that. On top of that, the share price is up 11% in about a quarter.
Check out our latest analysis for discoverIE Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 three years of share price growth, discoverIE Group achieved compound earnings per share growth of 47% per year. This EPS growth is higher than the 26% average annual increase in the share price. So it seems investors have become more cautious about the company, over time.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how discoverIE Group has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at discoverIE Group's financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between discoverIE Group's total shareholder return (TSR) and its share price change, which we've covered above. 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. discoverIE Group's TSR of 112% for the 3 years exceeded its share price return, because it has paid dividends.
A Different Perspective
It's good to see that discoverIE Group has rewarded shareholders with a total shareholder return of 39% in the last twelve months. That gain is better than the annual TSR over five years, which is 17%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand discoverIE Group better, we need to consider many other factors. For example, we've discovered 3 warning signs for discoverIE Group that you should be aware of before investing here.
Of course discoverIE Group 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 GB exchanges.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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The discoverIE Group (LON:DSCV) Share Price Is Up 102% And Shareholders Are Boasting About It - Yahoo Finance
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