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If You Had Bought Microequities Asset Management Group (ASX:MAM) Shares A Year Ago You'd Have Earned 11% Returns

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Microequities Asset Management Group Limited (ASX:MAM) share price is 11% higher than it was a year ago, much better than the market return of around 1.1% (not including dividends) in the same period. That's a solid performance by our standards! Microequities Asset Management Group hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Microequities Asset Management Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year Microequities Asset Management Group grew its earnings per share (EPS) by 32%. This EPS growth is significantly higher than the 11% increase in the share price. So it seems like the market has cooled on Microequities Asset Management Group, despite the growth. Interesting.

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

earnings-per-share-growth
earnings-per-share-growth

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. It might be well worthwhile taking a look at our free report on Microequities Asset Management Group's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Microequities Asset Management Group, it has a TSR of 15% 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.

A Different Perspective

It's nice to see that Microequities Asset Management Group shareholders have gained 15% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 18% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. 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. For instance, we've identified 3 warning signs for Microequities Asset Management Group (1 doesn't sit too well with us) that you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.