Retail Value Inc. (NYSE:RVI) shareholders should be happy to see the share price up 13% in the last month. But that’s small comfort given the dismal price performance over the last year. During that time the share price has sank like a stone, descending 64%. It’s not that amazing to see a bounce after a drop like that. It may be that the fall was an overreaction.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, Retail Value had to report a 78% decline in EPS over the last year. This fall in the EPS is significantly worse than the 64% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn’t more difficult.
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 Retail Value’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Retail Value the TSR over the last year was -62%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Given that the market gained 6.5% in the last year, Retail Value shareholders might be miffed that they lost 62% (even including dividends) . While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. It’s worth noting that the last three months did the real damage, with a 63% decline. This probably signals that the business has recently disappointed shareholders – it will take time to win them back. It’s always interesting to track share price performance over the longer term. But to understand Retail Value better, we need to consider many other factors. Even so, be aware that Retail Value is showing 6 warning signs in our investment analysis , and 1 of those is concerning…
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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 US exchanges.
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This article by Simply Wall St is general in nature. 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. Thank you for reading.