In This Article:
It hasn't been the best quarter for Siyaram Silk Mills Limited (NSE:SIYSIL) shareholders, since the share price has fallen 10% in that time. On the bright side the returns have been quite good over the last half decade. After all, the share price is up a market-beating 78% in that time. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 47% decline over the last twelve months.
View our latest analysis for Siyaram Silk Mills
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. 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.
During five years of share price growth, Siyaram Silk Mills achieved compound earnings per share (EPS) growth of 8.8% per year. This EPS growth is lower than the 12% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
This free interactive report on Siyaram Silk Mills's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Siyaram Silk Mills the TSR over the last 5 years was 87%, 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
While the broader market lost about 0.5% in the twelve months, Siyaram Silk Mills shareholders did even worse, losing 46% (even including dividends) . However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Is Siyaram Silk Mills cheap compared to other companies? These 3 valuation measures might help you decide.