Yahoo Finance Those who invested in Genesis Land Development (TSE:GDC) three years ago are up 113%
By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Genesis Land Development Corp. (TSE:GDC) share price is up 79% in the last three years, clearly besting the market return of around 36% (not including dividends).
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Genesis Land Development
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, Genesis Land Development moved from a loss to profitability. So we would expect a higher share price over the period.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Genesis Land Development's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About The Total Shareholder Return (TSR)?
Investors should note that there's a difference between Genesis Land Development'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 Genesis Land Development shareholders, and that cash payout contributed to why its TSR of 113%, over the last 3 years, is better than the share price return.
A Different Perspective
The total return of 3.4% received by Genesis Land Development shareholders over the last year isn't far from the market return of -3.7%. However, the loss over the last year isn't as bad as the 6% per annum loss investors have suffered over the last half decade. Generally speaking we'd prefer see an improvement in the fundamental metrics before becoming enthusiastic about the stock. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Genesis Land Development is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
We will like Genesis Land Development better if we see some big insider buys. While we wait, check out this free list of growing companies 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 Canadian 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.
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