While it may not be enough for some shareholders, we think it is good to see the KRUK Spólka Akcyjna (WSE:KRU) share price up 22% in a single quarter. But that is small recompense for the exasperating returns over three years. Tragically, the share price declined 56% in that time. Some might say the recent bounce is to be expected after such a bad drop. While many would remain nervous, there could be further gains if the business can put its best foot forward.
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…’ 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.
KRUK Spólka Akcyjna saw its EPS decline at a compound rate of 37% per year, over the last three years. This fall in the EPS is worse than the 24% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into KRUK Spólka Akcyjna’s key metrics by checking this interactive graph of KRUK Spólka Akcyjna’s earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We’ve already covered KRUK Spólka Akcyjna’s share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. KRUK Spólka Akcyjna’s TSR of was a loss of 54% for the 3 years. That wasn’t as bad as its share price return, because it has paid dividends.
A Different Perspective
KRUK Spólka Akcyjna shareholders are down 16% over twelve months, which isn’t far from the market return of -15%. Unfortunately, last year’s performance is a deterioration of an already poor long term track record, given the loss of 3.7% per year over the last five years. It will probably take a substantial improvement in the fundamental performance for the company to reverse this trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We’ve spotted 2 warning signs for KRUK Spólka Akcyjna you should be aware of, and 1 of them can’t be ignored.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on PL 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.
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