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If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Concurrent Technologies Plc (LON:CNC) share price is 95% higher than it was a year ago, much better than the market return of around 9.5% (not including dividends) in the same period. That's a solid performance by our standards! Also impressive, the stock is up 79% over three years, making long term shareholders happy, too.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
Check out our latest analysis for Concurrent Technologies
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).
Concurrent Technologies was able to grow EPS by 182% in the last twelve months. It's fair to say that the share price gain of 95% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Concurrent Technologies as it was before. This could be an opportunity.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Concurrent Technologies has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
A Different Perspective
It's good to see that Concurrent Technologies has rewarded shareholders with a total shareholder return of 97% in the last twelve months. That's including the dividend. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Concurrent Technologies better, we need to consider many other factors. Take risks, for example - Concurrent Technologies has 1 warning sign we think you should be aware of.
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.