If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the MNRB Holdings Berhad (KLSE:MNRB) share price is 29% higher than it was a year ago, much better than the market return of around 3.8% (not including dividends) in the same period. That's a solid performance by our standards! Zooming out, the stock is up 28% in the last three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
See our latest analysis for MNRB Holdings Berhad
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.
MNRB Holdings Berhad was able to grow EPS by 375% in the last twelve months. This EPS growth is significantly higher than the 29% increase in the share price. Therefore, it seems the market isn't as excited about MNRB Holdings Berhad as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 4.13.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that MNRB Holdings Berhad has improved its bottom line lately, but is it going to grow revenue? Check if analysts think MNRB Holdings Berhad will grow revenue in the future.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of MNRB Holdings Berhad, it has a TSR of 35% for the last 1 year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's nice to see that MNRB Holdings Berhad shareholders have received a total shareholder return of 35% over the last year. Of course, that includes the dividend. That's better than the annualised return of 6% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For instance, we've identified 2 warning signs for MNRB Holdings Berhad (1 doesn't sit too well with us) that you should be aware of.