Did You Participate In Any Of Caribbean Investment Holdings’ (LON:CIHL) Incredible 423% Return? – Yahoo Finance

For many, the main point of investing in the stock market is to achieve spectacular returns. And we've seen some truly amazing gains over the years. Don't believe it? Then look at the Caribbean Investment Holdings Limited (LON:CIHL) share price. It's 339% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will.

See our latest analysis for Caribbean Investment Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

We know that Caribbean Investment Holdings has been profitable in the past. However, it made a loss in the last twelve months, suggesting profit may be an unreliable metric at this stage. So we might find other metrics can better explain the share price movements.

We are not particularly impressed by the annual compound revenue growth of 1.2% over five years. So why is the share price up? It's not immediately obvious to us, but a closer look at the company's progress over time might yield answers.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth

Take a more thorough look at Caribbean Investment Holdings' financial health with this free report on its balance sheet.

We've already covered Caribbean Investment Holdings' share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Caribbean Investment Holdings' TSR of 423% for the 5 years exceeded its share price return, because it has paid dividends.

Story continues

While the broader market gained around 32% in the last year, Caribbean Investment Holdings shareholders lost 5.6%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 39% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Caribbean Investment Holdings that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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Did You Participate In Any Of Caribbean Investment Holdings' (LON:CIHL) Incredible 423% Return? - Yahoo Finance