Shareholders of Syngene International (NSE: SYNGENE) have gained 17% CAGR over the past five years
The maximum you can lose on any stock (assuming you aren’t using leverage) is 100% of your money. But on the bright side, if you buy shares of a high quality company for the right price, you can earn well over 100%. A good example is Syngene International Limited (NSE: SYNGENE) which has seen its share price increase by 117% in five years. Last week, the stock price fell about 2.8%.
So let’s assess the underlying fundamentals over the past 5 years and see if they have moved in line with shareholder returns.
See our latest analysis for Syngene International
While the markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying business performance. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.
In five years, Syngene International has managed to increase its earnings per share by 8.9% per year. This EPS growth is slower than the share price growth of 17% per year over the same period. So it’s fair to assume that the market has a better opinion of the company than it did five years ago. And that’s hardly shocking given the growth history. This optimism can be seen in its fairly high P / E ratio of 56.89.
You can see below how the EPS has evolved over time (see the exact values by clicking on the image).
We know that Syngene International has improved its results lately, but will its turnover increase? You could check that out free report showing analysts’ earnings forecasts.
A different perspective
Syngene International shareholders are down 3.7% on the year, but the market itself is up 36%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the plus side, long-term shareholders made money, gaining 17% per year over half a decade. The recent sell-off may be an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. I find it very interesting to look at the stock price over the long term as an indicator of company performance. But to really understand better, we have to take other information into account as well. Take risks, for example – Syngene International has 1 warning sign we think you should be aware.
If you are like me then you not want to miss it free list of growing companies that insiders buy.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks that currently trade on the IN exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.