Unlocking Profits: How a 71% Return on Food Empire Holdings (SGX:F03) Has Rewarded Investors Over the Past Three Years

Investing in an index fund can give you a taste of average market returns. But choosing the right stocks can lead to even better outcomes. For instance, the share price of Food Empire Holdings Limited (SGX:F03) increased by 44% in the last three years, far outpacing the market’s return of just 1%. Now, let’s dig into what’s behind these numbers.

Looking at a company’s performance over time helps us evaluate how well it rewards its shareholders. But remember, stock prices often reflect how investors feel, not just how the business is doing.

Food Empire Holdings managed to grow its earnings per share (EPS) by 30% each year over three years. However, the share price rose by an average of only 13% per year. This suggests that investors might be holding back their expectations for future growth. The company’s price-to-earnings ratio of 7.12 indicates some negative sentiment surrounding the stock.

To see how EPS has changed over time, you can look at a graph that tracks its growth.

When assessing investments, consider the total shareholder return (TSR), which includes the value of dividends you might reinvest. For Food Empire Holdings, the TSR over the past three years was 71%, which is significantly higher than the share price return, largely thanks to its dividends.

This past year was tough for Food Empire Holdings investors, with a total loss of 24% when factoring in dividends, while the broader market gained about 23%. Even strong stocks can struggle over a short period. Still, if you look back five years, long-term investors have seen average yearly returns of 11%. This current dip might be an opportunity for new investors to jump in and look for signs of sustainable growth.

However, it’s crucial to remember the risks involved. Understanding any potential issues with a company is essential when investing. For example, we’ve identified one area of concern with Food Empire Holdings, and knowing this can help you make informed decisions.