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While Insecticides (India) Limited (NSE:INSECTICID) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 11% in the last quarter. In contrast the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 17% over that time, given the rising market.
Check out our latest analysis for Insecticides (India)
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, Insecticides (India) achieved compound earnings per share growth of 30% per year. The average annual share price increase of 5.2% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time. This cautious sentiment is reflected in its (fairly low) P/E ratio of 8.66.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Insecticides (India) has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Insecticides (India)'s total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Insecticides (India) shareholders, and that cash payout contributed to why its TSR of 18%, over the last 3 years, is better than the share price return.
A Different Perspective
It's good to see that Insecticides (India) has rewarded shareholders with a total shareholder return of 8.3% in the last twelve months. That's including the dividend. Notably the five-year annualised TSR loss of 0.7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research Insecticides (India) in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.