Orient Bell (NSE:ORIENTBELL) shareholder returns have been favorable, earning 51% in 5 years

The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market. But Orient Bell Limited (NSE:ORIENTBELL) has fallen short of that second goal, with a share price rise of 50% over five years, which is below the market return. Unfortunately the share price is down 4.0% in the last year.

Since the stock has added ₹638m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, Orient Bell became profitable. That would generally be considered a positive, so we'd hope to see the share price to rise.

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

This free interactive report on Orient Bell's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Orient Bell shareholders are down 3.9% for the year (even including dividends), but the market itself is up 4.3%. 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 9% 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 Orient Bell better, we need to consider many other factors. Take risks, for example - Orient Bell has 2 warning signs we think you should be aware of.

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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 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 only using an unbiased methodology and our articles are not intended to be financial advice. 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.