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Those who invested in Nine Entertainment Holdings (ASX:NEC) five years ago are up 87%

Generally speaking, the goal of aggressive stock selection is to find companies that offer returns that are better than the market average. Acquiring undervalued companies is one way to excess earnings. That means Nine Entertainment Holdings stock has risen 47% in his five years, easily outperforming its 21% market return (ignoring dividends).

Here, the company’s fundamentals are also worth taking a look at. This is because it helps determine whether long-term shareholder returns are aligned with the performance of the underlying business.

Check out the latest analysis from Nine Entertainment Holdings.

Markets are powerful pricing mechanisms, but stock prices reflect investor sentiment, not just underlying performance. By comparing earnings per share (EPS) and stock price over time, you can get a sense of how investor attitudes toward companies have changed over time.

Over the past five years, Nine Entertainment Holdings has turned profitable. This is generally considered to be a true plus, so the stock price is expected to rise. The company was unprofitable five years before him, three years ago it was unprofitable, so it’s worth looking at the last three years of earnings as well. In fact, Nine Entertainment Holdings stock has risen 4.9% in his three years. During the same period, EPS grew by 4.7% each year. This EPS growth outpaces the same three-year stock price average of 1.6% per year. So we might conclude that the market has been a little more cautious on equities lately.

You can see how the EPS changed over time in the image below (click on the graph to see exact values).

ASX: NEC Earnings Per Share Growth Sep 14, 2022

We are pleased to report that CEO compensation is more modest than most CEOs at companies of similar capital size. But while CEO compensation is always worth checking, the really important question is whether the company will be profitable going forward. Dig deeper into earnings by checking out this interactive graph of Nine Entertainment Holdings earnings, earnings and cash flow.

What is the dividend?

It is important to consider total shareholder return and share price return for a particular stock. TSR incorporates the value of spin-off or discounted capital raising along with dividends, based on the assumption that dividends are reinvested. Arguably, the TSR is a more comprehensive representation of the returns generated by equities. Coincidentally, Nine Entertainment Holdings’ TSR has been 87% over the past five years, outperforming the aforementioned stock return. And there are no prizes to speculate that dividend payouts account for the difference primarily!

another point of view

While the broader market fell about 1.9% over the 12-month period, Nine Entertainment Holdings shareholders were even worse, down 14% (even including the dividend). But it could simply be that the stock has been impacted by broader market jitters. Given the good opportunity, it might be worth keeping an eye on the fundamentals. On the bright side, long-term shareholders are profitable, earning 13% per annum over five years. It may be worth checking the fundamental data for signs of a long-term growth trend, as the recent plunge could be an opportunity. I find it very interesting to look at stock prices over the long term as an indicator of performance. But for true insight, other information must also be considered.Even so, Nine Entertainment Holdings is showing it, so be careful One Warning Sign in Investment Analysis what you should know…

if you were like me you would No i want to miss this freedom A list of growth companies that insiders are buying.

Please note that the market returns quoted in this article reflect market-weighted average returns for stocks currently traded on the AU exchange.

This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Is not …

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To find out if Nine Entertainment Holdings may be overvalued or undervalued, check out our comprehensive analysis, including: Fair value estimates, risks and warnings, dividends, insider trading and financial health.

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