Yahoo Finance Investing in Frasers Group (LON:FRAS) five years ago would have delivered you a 247% gain
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Frasers Group Plc (LON:FRAS) share price has soared 247% in the last half decade. Most would be very happy with that.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Frasers Group
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).
During the last half decade, Frasers Group became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Frasers Group has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Frasers Group stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Frasers Group provided a TSR of 7.6% over the last twelve months. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 28% per year for five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. If you would like to research Frasers Group in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like Frasers Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
