The most you can lose on any stock (assuming you don't use leverage) is 100% of 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 instance, the price of Be Think, Solve, Execute S.p.A. (BIT:BET) stock is up an impressive 130% over the last five years. It's down 3.6% in the last seven days.
View our latest analysis for Be Think Solve Execute
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 five years of share price growth, Be Think Solve Execute achieved compound earnings per share (EPS) growth of 60% per year. This EPS growth is higher than the 18% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Be Think Solve Execute has grown profits over the years, but the future is more important for shareholders. This free interactive report on Be Think Solve Execute's balance sheet strength is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Be Think Solve Execute, it has a TSR of 152% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's good to see that Be Think Solve Execute has rewarded shareholders with a total shareholder return of 6.6% in the last twelve months. That's including the dividend. Having said that, the five-year TSR of 20% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. Before forming an opinion on Be Think Solve Execute you might want to consider these 3 valuation metrics.