Yahoo Finance Imagine Holding SDI Group (LON:SDI) Shares While The Price Zoomed 475% Higher
We think all investors should try to buy and hold high quality multi-year winners. While not every stock performs well, when investors win, they can win big. To wit, the SDI Group plc (LON:SDI) share price has soared 475% over five years. And this is just one example of the epic gains achieved by some long term investors. On top of that, the share price is up 29% in about a quarter.
View our latest analysis for SDI Group
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.
During five years of share price growth, SDI Group achieved compound earnings per share (EPS) growth of 77% per year. The EPS growth is more impressive than the yearly share price gain of 42% over the same period. Therefore, it seems the market has become relatively pessimistic about the company.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that SDI Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at SDI Group's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that SDI Group shareholders have received a total shareholder return of 30% over the last year. Having said that, the five-year TSR of 42% a year, is even better. 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 example, we've discovered 3 warning signs for SDI Group that you should be aware of before investing here.
We will like SDI Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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.
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