Investment Trust of India (NSE:THEINVEST) has a strong shareholder return of 38% in 1 year.

The easiest way to invest in stocks is to buy exchange traded funds. But you can do better than that by choosing stocks that are better than the average (as part of a diversified portfolio). In other words, The Investment Trust of India Limited (NSE:THEINVEST)’s share price is up 38% from a year ago, much better than the market return of around 26% (not including dividends) over the same period. If it can sustain that outperformance over time, investors will do very well.If you zoom out, the stock price is actually under 19% over the past three years.

In the past week alone, the stock’s market capitalization has increased by ₹823m, so let’s take a look to see if the underlying performance is delivering long-term returns.

See our latest analysis for Mutual Funds in India.

Although the efficient markets hypothesis continues to be taught by some, it has been proven that markets are dynamic systems that overreact and that investors are not always rational. One imperfect but simple way to consider how the market perception of a company has changed is to compare the change in the earnings per share (EPS) with the share price movement.

Last year, Investment Trust of India increased its earnings per share, moving from a loss to a profit.

If a company has just moved into profitability, earnings per share growth isn’t necessarily the best way to watch its share price move.

Investment Trust of India’s revenue actually fell by 12% compared to last year. Therefore, fundamental indicators do not provide a clear explanation for stock price increases.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Let’s now take a more thorough look at Investment Trust of India’s financial health. free Report the balance sheet.

different perspective

It’s good to see that Investment Trust of India returned a total shareholder return of 38% to shareholders in the over the last twelve months. This is certainly higher than the annual loss of about 5% over the past five years. Long-term losses make us cautious, but short-term TSR increases certainly suggest a bright future. It’s always interesting to track stock performance over the long term. But to understand mutual funds in India better, you need to consider many other factors. For example, risk.Every company has them and we discovered that 4 warning signs for Indian mutual funds (Two of which make us uncomfortable!) You should know.

If you’re like me, you will. do not have I want to miss this free A list of growing 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 Indian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.