Investors Who Bought Varun Beverages (NSE:VBL) Shares A Year Ago Are Now Up 29%
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Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Varun Beverages Limited (NSE:VBL) share price is 29% higher than it was a year ago, much better than the market return of around -3.1% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Varun Beverages for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Check out our latest analysis for Varun Beverages
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 Varun Beverages grew its earnings per share (EPS) by 41%. This EPS growth is significantly higher than the 29% increase in the share price. So it seems like the market has cooled on Varun Beverages, despite the growth. Interesting. Of course, with a P/E ratio of 55.95, the market remains optimistic.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
Varun Beverages boasts a total shareholder return of 30% for the last year(that includes the dividends). And the share price momentum remains respectable, with a gain of 14% in the last three months. This suggests the company is continuing to win over new investors. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Varun Beverages by clicking this link.
Varun Beverages is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.
