Giantplus Technology (TWSE:8105) shareholder returns have been remarkable, gaining 63% in 5 years

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. But Giantplus Technology Co., Ltd. (TWSE:8105) has fallen short of that second target, with a share price increase of 59% over five years, which is below the market return. Looking closer, the stock is up a respectable 11% over the past year.

As the stock added NT$773 million to its market value last week alone, let’s see if the underlying performance has generated long-term returns.

Check out our latest review for Giantplus Technology

In his essay The Graham-and-Doddsville Superinvestors Warren Buffett has described how stock prices do not always rationally reflect the value of a business. One flawed but reasonable way to gauge how sentiment around a company has changed is to compare earnings per share (EPS) to the stock price.

During the five years of share price growth, Giantplus Technology has gone from loss-making to profitability. This would generally be considered positive, so we expect to see the share price rise.

The image below shows EPS performance over time (if you click on the image you can see more details).

Dive deeper into Giantplus Technology’s key metrics by checking out this interactive graph of Giantplus Technology’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. While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It is fair to say that the TSR gives a more complete picture for stocks that pay a dividend. It turns out that Giantplus Technology’s TSR over the past 5 years was 63%, which exceeds the share price return mentioned earlier. The dividends paid by the company thus boosted the total return to shareholder.

A Different Perspective

Giantplus Technology has delivered a TSR of 12% over the last twelve months. Unfortunately, this falls short of the market return. On the positive side, the earnings were actually better than the five-year average annual return of 10%. This suggests that the company may be improving over time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to really gain insights, we need to consider other information as well. For example, 1 warning sign for Giantplus Technology that you should be aware of.

Clear, you may find a fantastic investment by looking elsewhere. So take a look at this free list of companies that we expect to increase profits.

Please note that the market returns quoted in this article reflect the market weighted average returns of stocks currently traded on Taiwanese stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our aim is to bring you long-term focused analysis, driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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