Announcing: Malu Paper Mills (NSE:MALUPAPER) Stock Increased An Energizing 137% In The Last Five Years

The Malu Paper Mills Limited (NSE:MALUPAPER) share price has had a bad week, falling 22%. But in stark contrast, the returns over the last half decade have impressed. It's fair to say most would be happy with 137% the gain in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 41% drop, in the last year.

See our latest analysis for Malu Paper Mills

There is no denying that markets are sometimes efficient, but prices do not always reflect 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, Malu Paper Mills achieved compound earnings per share (EPS) growth of 29% per year. This EPS growth is higher than the 19% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 6.53.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

NSEI:MALUPAPER Past and Future Earnings, October 16th 2019
NSEI:MALUPAPER Past and Future Earnings, October 16th 2019

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

Investors in Malu Paper Mills had a tough year, with a total loss of 41%, against a market gain of about 2.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 19% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Malu Paper Mills it might be wise to click here to see if insiders have been buying or selling shares.

We will like Malu Paper Mills better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.