We think it’s fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Mistakes are inevitable, but a single selection of top-notch stocks can cover all the losses, and more. One of these superstars is Poly Medicine Limited (NSE: POLYMED), which has seen its share price rise by 355% in three years. It also increased by 19% in about a month. This could be related to the recent financial results that have been published recently – you can check the most recent data by reading our company report.
Last week proved lucrative for Poly Medicure investors, so let’s see if fundamentals drove the company’s three-year performance.
However, if you prefer to see where opportunities and risks are within POLYMED’s industryyou can check our analysis on the IN medical equipment industry.
To quote Buffett, “Ships will circumnavigate the globe, but the Flat Earth Society will prosper. There will continue to be wide gaps between price and value in the market…’ By comparing earnings per share (EPS) and share price changes over time, we can get an idea changes in investors’ attitude towards a company over time.
Over three years of share price growth, Poly Medicure has achieved compound earnings per share growth of 20% per year. This EPS growth is less than the average annual share price increase of 66%. This indicates that the market is feeling more optimistic about the stock, after recent years of progress. It is not uncommon to see the market “revalue” a stock after a few years of growth. This favorable sentiment is reflected in its (rather optimistic) P/E ratio of 61.91.
The image below shows how EPS has tracked over time (if you click on the image you can see more details).
Dive deeper into Poly Medicure’s key metrics by viewing this interactive graph of Poly Medicure’s earnings, revenue, and cash flow.
What about dividends?
In addition to measuring share price performance, investors should also consider total shareholder return (TSR). TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. It can be said that the TSR gives a more complete picture of the return generated by a stock. Note that for Poly Medicure the TSR over the last 3 years was 363%, which is better than the share price return mentioned above. And there’s no price guessing that dividend payouts largely explain the divergence!
A different perspective
While the broader market has gained about 9.5% over the past year, Poly Medicure shareholders have lost 7.4% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the positive side, long-term shareholders have made money, with a gain of 34% per year over half a decade. It could be that the recent selloff is an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. Before spending more time on Poly Medicure, it might be wise to click here to see if any insiders have been buying or selling stocks.
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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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.
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