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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the Inission AB (publ) (STO:INISS B) share price has flown 156% in the last three years. That sort of return is as solid as granite. Also pleasing for shareholders was the 31% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
See our latest analysis for Inission
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During three years of share price growth, Inission achieved compound earnings per share growth of 39% per year. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 37% average annual increase in the share price. This observation indicates that the market's attitude to the business hasn't changed all that much. Rather, the share price has approximately tracked EPS growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Inission's TSR for the last 3 years was 169%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Inission rewarded shareholders with a total shareholder return of 138% over the last year. That's including the dividend. So this year's TSR was actually better than the three-year TSR (annualized) of 39%. The improving returns to shareholders suggests the stock is becoming more popular with time. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Inission by clicking this link.