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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the B.P. Marsh & Partners PLC (LON:BPM) share price has soared 149% in the last half decade. Most would be very happy with that. On top of that, the share price is up 20% in about a quarter.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for B.P. Marsh & Partners
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...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During five years of share price growth, B.P. Marsh & Partners achieved compound earnings per share (EPS) growth of 25% per year. The EPS growth is more impressive than the yearly share price gain of 20% over the same period. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 4.84.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that B.P. Marsh & Partners has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling B.P. Marsh & Partners stock, you should check out this FREE detailed report on its balance sheet.
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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for B.P. Marsh & Partners the TSR over the last 5 years was 165%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
We're pleased to report that B.P. Marsh & Partners shareholders have received a total shareholder return of 54% over one year. That's including the dividend. That's better than the annualised return of 22% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. If you would like to research B.P. Marsh & Partners in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.