A Look At Sharda Motor Industries' (NSE:SHARDAMOTR) Share Price Returns

If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Sharda Motor Industries Limited (NSE:SHARDAMOTR) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 66% drop in the share price over that period. More recently, the share price has dropped a further 20% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Check out our latest analysis for Sharda Motor Industries

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Sharda Motor Industries saw its EPS decline at a compound rate of 27% per year, over the last three years. This change in EPS is reasonably close to the 30% average annual decrease in the share price. So it seems like sentiment towards the stock hasn't changed all that much over time. In this case, it seems that the EPS is guiding the share price.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Sharda Motor Industries' key metrics by checking this interactive graph of Sharda Motor Industries's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Sharda Motor Industries' share price action, but we should also mention its total shareholder return (TSR). 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. Dividends have been really beneficial for Sharda Motor Industries shareholders, and that cash payout explains why its total shareholder loss of 58%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

It's good to see that Sharda Motor Industries has rewarded shareholders with a total shareholder return of 11% in the last twelve months. That's better than the annualised return of 2.8% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. To that end, you should be aware of the 3 warning signs we've spotted with Sharda Motor Industries .

If you are like me, then you will not want to miss this free 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 IN exchanges.

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