27-04-2025
Biglari Holdings' (NYSE:BH.A) investors will be pleased with their strong 242% return over the last five years
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. Long term Biglari Holdings Inc. (NYSE:BH.A) shareholders would be well aware of this, since the stock is up 242% in five years. Meanwhile the share price is 3.0% higher than it was a week ago.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Over half a decade, Biglari Holdings managed to grow its earnings per share at 12% a year. We note, however, that extraordinary items have impacted earnings. This EPS growth is slower than the share price growth of 28% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
It's good to see that Biglari Holdings has rewarded shareholders with a total shareholder return of 11% in the last twelve months. However, that falls short of the 28% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. You could get a better understanding of Biglari Holdings' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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