If you love investing in stocks you’re bound to buy some losers. Long term Uni-Select Inc. (TSE:UNS) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 68% in that time. And more recent buyers are having a tough time too, with a drop of 53% in the last year. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days.
To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ 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.
During the three years that the share price fell, Uni-Select’s earnings per share (EPS) dropped by 39% each year. In comparison the 32% compound annual share price decline isn’t as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment — or it may have previously priced some of the drop in.
The image below shows how EPS has tracked over time.
It might be well worthwhile taking a look at our free report on Uni-Select’s earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We’ve already covered Uni-Select’s 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 Uni-Select shareholders, and that cash payout explains why its total shareholder loss of 66%, over the last 3 years, isn’t as bad as the share price return.
A Different Perspective
Investors in Uni-Select had a tough year, with a total loss of 52% (including dividends) , against a market gain of about 1.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 4.4% per year over five years. We realise that Buffett has said investors should ‘buy when there is blood on the streets’, but we caution that investors should first be sure they are buying a high quality businesses. Importantly, we haven’t analysed Uni-Select’s dividend history. This free visual report on its dividends is a must-read if you’re thinking of buying.
But note: Uni-Select may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.