What Type Of Returns Would MPH Health Care's(ETR:93M) Shareholders Have Earned If They Purchased Their SharesYear Ago?

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in MPH Health Care AG (ETR:93M) have tasted that bitter downside in the last year, as the share price dropped 28%. That contrasts poorly with the market return of 11%. At least the damage isn't so bad if you look at the last three years, since the stock is down 20% in that time. Unhappily, the share price slid 1.8% in the last week.

Check out our latest analysis for MPH Health Care

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 last year MPH Health Care grew its earnings per share, moving from a loss to a profit.

We're surprised that the share price is lower given that improvement. If the improved profitability is a sign of things to come, then right now may prove the perfect time to pop this stock on your watchlist.

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

It might be well worthwhile taking a look at our free report on MPH Health Care's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between MPH Health Care's total shareholder return (TSR) and its share price return. 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 MPH Health Care shareholders, and that cash payout explains why its total shareholder loss of 28%, over the last year, isn't as bad as the share price return.

A Different Perspective

While the broader market gained around 11% in the last year, MPH Health Care shareholders lost 28%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 8.0%, each year, over five years. 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 MPH Health Care better, we need to consider many other factors. For instance, we've identified 2 warning signs for MPH Health Care that you should be aware of.

But note: MPH Health Care 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 DE 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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