When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, the Betterware de Mexico, S.A.B. de C.V. (NASDAQ:BWMX) share price is up a whopping 473% in the last year, a handsome return in a single year. It’s also up 13% in about a month. This could be related to the recent financial results that were recently released – you could check the most recent data by reading our company report. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long-term trend.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 the last year Betterware de Mexico. de grew its earnings per share (EPS) by 25%. The share price gain of 473% certainly outpaced the EPS growth. So it’s fair to assume the market has a higher opinion of the business than it a year ago.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It is of course excellent to see how Betterware de Mexico. de has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Betterware de Mexico. de’s financial health with this free report on its balance sheet.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Betterware de Mexico. de, it has a TSR of 514% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
Source: El Economista