Fonterra Co-operative Group's (NZSE:FCG) investors will be pleased with their stellar 120% return over the last year
The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. To wit, the Fonterra Co-operative Group Limited (NZSE:FCG) share price is 88% higher than it was a year ago, much better than the market return of around 0.9% (not including dividends) in the same period. That's a solid performance by our standards! Looking back further, the stock price is 82% higher than it was three years ago.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the last twelve months, Fonterra Co-operative Group actually shrank its EPS by 17%.
Given the share price gain, we doubt the market is measuring progress with EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.
We note that the most recent dividend payment is higher than the payment a year ago, so that may have assisted the share price. It could be that the company is reaching maturity and dividend investors are buying for the yield, pushing the price up in the process. Though we must add that the revenue growth of 4.3% year on year would have helped paint a pretty picture.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Fonterra Co-operative Group's earnings, revenue and cash flow.
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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Fonterra Co-operative Group the TSR over the last 1 year was 120%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
It's nice to see that Fonterra Co-operative Group shareholders have received a total shareholder return of 120% over the last year. Of course, that includes the dividend. That's better than the annualised return of 17% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Fonterra Co-operative Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Fonterra Co-operative Group (at least 1 which is significant) , and understanding them should be part of your investment process.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap 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 New Zealander exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using 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 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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
7 days ago
- Yahoo
We Ran A Stock Scan For Earnings Growth And Tower (NZSE:TWR) Passed With Ease
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Tower (NZSE:TWR). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. In the last three years Tower's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Outstandingly, Tower's EPS shot from NZ$0.10 to NZ$0.26, over the last year. It's not often a company can achieve year-on-year growth of 152%. One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The good news is that Tower is growing revenues, and EBIT margins improved by 10.8 percentage points to 21%, over the last year. That's great to see, on both counts. In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image. Check out our latest analysis for Tower Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Tower. Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions. The first bit of good news is that no Tower insiders reported share sales in the last twelve months. Even better, though, is that the company insider, Blair Turnbull, bought a whopping NZ$429k worth of shares, paying about NZ$1.48 per share, on average. Big buys like that may signal an opportunity; actions speak louder than words. Tower's earnings have taken off in quite an impressive fashion. Most growth-seeking investors will find it hard to ignore that sort of explosive EPS growth. And may very well signal a significant inflection point for the business. If this is the case, then keeping a watch over Tower could be in your best interest. We should say that we've discovered 2 warning signs for Tower (1 makes us a bit uncomfortable!) that you should be aware of before investing here. There are plenty of other companies that have insiders buying up shares. So if you like the sound of Tower, you'll probably love this curated collection of companies in NZ that have an attractive valuation alongside insider buying in the last three months. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using 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 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.
Yahoo
14-06-2025
- Yahoo
Several Insiders Invested In AFT Pharmaceuticals Flagging Positive News
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in AFT Pharmaceuticals Limited's (NZSE:AFT) instance, it's good news for shareholders. Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Andrew Lane for NZ$257k worth of shares, at about NZ$2.71 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being NZ$2.66). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. AFT Pharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date! Check out our latest analysis for AFT Pharmaceuticals AFT Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying. Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that AFT Pharmaceuticals insiders own 69% of the company, worth about NZ$193m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders. It doesn't really mean much that no insider has traded AFT Pharmaceuticals shares in the last quarter. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, AFT Pharmaceuticals insiders feel good about the company's future. Of course, the future is what matters most. So if you are interested in AFT Pharmaceuticals, you should check out this free report on analyst forecasts for the company. If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using 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 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.
Yahoo
14-06-2025
- Yahoo
Briscoe Group (NZSE:BGP) Is Doing The Right Things To Multiply Its Share Price
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So on that note, Briscoe Group (NZSE:BGP) looks quite promising in regards to its trends of return on capital. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Briscoe Group: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.19 = NZ$104m ÷ (NZ$692m - NZ$135m) (Based on the trailing twelve months to January 2025). So, Briscoe Group has an ROCE of 19%. By itself that's a normal return on capital and it's in line with the industry's average returns of 19%. See our latest analysis for Briscoe Group Above you can see how the current ROCE for Briscoe Group compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for Briscoe Group . Briscoe Group's ROCE growth is quite impressive. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 23% over the last five years. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. It's worth looking deeper into this though because while it's great that the business is more efficient, it might also mean that going forward the areas to invest internally for the organic growth are lacking. To bring it all together, Briscoe Group has done well to increase the returns it's generating from its capital employed. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. One more thing to note, we've identified 1 warning sign with Briscoe Group and understanding it should be part of your investment process. While Briscoe Group may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using 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 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
