Earnings grew faster than the notable 59% return delivered to AWC Berhad (KLSE:AWC) shareholders over the last year

Simply Wall St · 10/17 22:20

The last three months have been tough on AWC Berhad (KLSE:AWC) shareholders, who have seen the share price decline a rather worrying 36%. But looking back over the last year, the returns have actually been rather pleasing! After all, the share price is up a market-beating 58% in that time.

Although AWC Berhad has shed RM33m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for AWC Berhad

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year AWC Berhad grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We are skeptical of the suggestion that the 1.2% dividend yield would entice buyers to the stock. However the year on year revenue growth of 4.6% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
KLSE:AWC Earnings and Revenue Growth October 17th 2024

We know that AWC Berhad has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling AWC Berhad stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that AWC Berhad shareholders have received a total shareholder return of 59% over the last year. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 10%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Even so, be aware that AWC Berhad is showing 2 warning signs in our investment analysis , you should know about...

But note: AWC Berhad may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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