Investors in Alvopetro Energy (CVE:ALV) have seen fantastic returns of 331% over the past five years

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07-03-2025

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Alvopetro Energy Ltd. (CVE:ALV) shareholders would be well aware of this, since the stock is up 217% in five years. On the other hand, we note it's down 9.7% in about a month. We note that the broader market is down 2.3% in the last month, and this may have impacted Alvopetro Energy's share price.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
See our latest analysis for Alvopetro Energy
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last half decade, Alvopetro Energy became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. In fact, the Alvopetro Energy stock price is 9.7% lower in the last three years. During the same period, EPS grew by 33% each year. It would appear there's a real mismatch between the increasing EPS and the share price, which has declined -3.3% a year for three years.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It is of course excellent to see how Alvopetro Energy has grown profits over the years, but the future is more important for shareholders. This free interactive report on Alvopetro Energy's balance sheet strength is a great place to start, if you want to investigate the stock further.
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Alvopetro Energy's TSR for the last 5 years was 331%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
While the broader market gained around 14% in the last year, Alvopetro Energy shareholders lost 11% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 34% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Alvopetro Energy better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Alvopetro Energy .
Of course Alvopetro Energy may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.
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