Yahoo Finance The 89% return delivered to Delticom's (ETR:DEX) shareholders actually lagged YoY earnings growth
These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Delticom AG (ETR:DEX) share price is 89% higher than it was a year ago, much better than the market return of around 5.4% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! In contrast, the longer term returns are negative, since the share price is 55% lower than it was three years ago.
Since it's been a strong week for Delticom shareholders, let's have a look at trend of the longer term fundamentals.
See our latest analysis for Delticom
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Delticom was able to grow EPS by 186% in the last twelve months. This EPS growth is significantly higher than the 89% increase in the share price. Therefore, it seems the market isn't as excited about Delticom as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 6.17.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Delticom has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.
A Different Perspective
It's nice to see that Delticom shareholders have received a total shareholder return of 89% over the last year. That certainly beats the loss of about 8% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Delticom that you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
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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.
