It is a pleasure to report that the The Ince Group plc (LON:INCE) is up 195% in the last quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 64% in the last three years. So the improvement may be a real relief to some. After all, could be that the fall was overdone.
View our latest analysis for Ince Group
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Ince Group became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So given the share price is down it's worth checking some other metrics too.
Revenue is actually up 49% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Ince Group further; while we may be missing something on this analysis, there might also be an opportunity.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We know that Ince Group has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Ince Group'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 Ince Group shareholders, and that cash payout explains why its total shareholder loss of 62%, over the last 3 years, isn't as bad as the share price return.
A Different Perspective
It's nice to see that Ince Group shareholders have gained 32% (in total) over the last year. That certainly beats the loss of about 17% per year over three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Ince Group is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...