CHAPTERS Group's (ETR:CHG) investors will be pleased with their solid 247% return over the last three years
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It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. To wit, the CHAPTERS Group AG (ETR:CHG) share price has flown 187% in the last three years. How nice for those who held the stock! In more good news, the share price has risen 10% in thirty days.
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.
See our latest analysis for CHAPTERS Group
CHAPTERS Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last 3 years CHAPTERS Group saw its revenue grow at 84% per year. That's well above most pre-profit companies. Along the way, the share price gained 42% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. Nonetheless, we'd say CHAPTERS Group is still worth investigating - successful businesses can often keep growing for long periods.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at CHAPTERS Group's financial health with this free report on its balance sheet.
What About The Total Shareholder Return (TSR)?
We've already covered CHAPTERS Group's share price action, but we should also mention its total shareholder return (TSR). 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. CHAPTERS Group hasn't been paying dividends, but its TSR of 247% exceeds its share price return of 187%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
It's good to see that CHAPTERS Group has rewarded shareholders with a total shareholder return of 15% in the last twelve months. Having said that, the five-year TSR of 25% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for CHAPTERS Group that you should be aware of.