Yahoo Finance Did j2 Global's (NASDAQ:JCOM) Share Price Deserve to Gain 58%?
Passive investing in index funds can generate returns that roughly match the overall market. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the j2 Global, Inc. (NASDAQ:JCOM) share price is up 58% in the last five years, slightly above the market return. It's also good to see a healthy gain of 35% in the last year.
See our latest analysis for j2 Global
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).
Over half a decade, j2 Global managed to grow its earnings per share at 4.9% a year. This EPS growth is slower than the share price growth of 9.5% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that j2 Global has improved its bottom line lately, but is it going to grow revenue? Check if analysts think j2 Global will grow revenue in the future.
What about the Total Shareholder Return (TSR)?
We've already covered j2 Global'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. Its history of dividend payouts mean that j2 Global's TSR of 72% over the last 5 years is better than the share price return.
A Different Perspective
It's nice to see that j2 Global shareholders have received a total shareholder return of 36% over the last year. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. If you would like to research j2 Global in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: j2 Global 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 US exchanges.
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.
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. Thank you for reading.
