When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Top Energy Company Ltd.Shanxi (SHSE:600780) share price has soared 217% in the last half decade. Most would be very happy with that. It's also good to see the share price up 17% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
The past week has proven to be lucrative for Top Energy CompanyShanxi investors, so let's see if fundamentals drove the company's five-year performance.
View our latest analysis for Top Energy CompanyShanxi
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During five years of share price growth, Top Energy CompanyShanxi achieved compound earnings per share (EPS) growth of 24% per year. This EPS growth is reasonably close to the 26% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Rather, the share price has approximately tracked EPS growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Top Energy CompanyShanxi's key metrics by checking this interactive graph of Top Energy CompanyShanxi's earnings, revenue and cash flow.
What About The Total Shareholder Return (TSR)?
We've already covered Top Energy CompanyShanxi's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Top Energy CompanyShanxi's TSR of 232% for the 5 years exceeded its share price return, because it has paid dividends.
A Different Perspective
We're pleased to report that Top Energy CompanyShanxi shareholders have received a total shareholder return of 57% over one year. That's better than the annualised return of 27% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before forming an opinion on Top Energy CompanyShanxi you might want to consider these 3 valuation metrics.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.