Jindal Worldwide (NSE:JINDWORLD) Three-Year Total Shareholder Returns Exceed Underlying Earnings Growth
For us, stock picking is largely the hunt for truly magnificent stock. You won’t be successful every time, but when you do, the returns can be truly splendid. One of these superstars is Jindal Worldwide Limited (NSE: JINDWORLD), which has seen its price soar by 435% in three years. Shareholders also appreciated the 50% gain over the past three months.
Although the stock has fallen 7.3% this week, it is worth focusing on the long term and seeing if historical stock returns have been driven by underlying fundamentals.
It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but reasonable way to gauge changing sentiment around a company is to compare earnings per share (EPS) with the stock price.
In three years of share price growth, Jindal Worldwide has achieved compound earnings per share growth of 79% per year. We note that the (average) 75% annual gain in share price is not far off the rate of EPS growth. Chance? Probably not. This suggests that market sentiment around the company hasn’t changed much over this period. On the contrary, the share price may have reflected the growth in EPS.
You can see below how the EPS has evolved over time (find out the exact values by clicking on the image).
It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. It’s always worth keeping an eye on CEO compensation, but a more important question is whether the company will grow its profits over the years. It might be interesting to take a look at our free Jindal Worldwide earnings, revenue and cash flow report.
A different perspective
We are pleased to report that Jindal Worldwide shareholders received a 98% year-on-year total shareholder return. And that includes the dividend. As the one-year TSR is better than the five-year TSR (the latter standing at 24% per year), it seems that the stock’s performance has improved lately. At best, this may hint at genuine trading momentum, implying that now could be a great time to dig deeper. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 2 warning signs for Jindal in the world which you should be aware of before investing here.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven that they can increase their profits.
Please note that the market returns quoted in this article reflect the average market-weighted returns of the stocks currently trading on the IN exchanges.
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Find out if Jindal in the world is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.