What Type Of Returns Would Prestige Estates Projects'(NSE:PRESTIGE) Shareholders Have Earned If They Purchased Their SharesYear Ago?

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Prestige Estates Projects Limited (NSE:PRESTIGE) have tasted that bitter downside in the last year, as the share price dropped 21%. That's disappointing when you consider the market declined 2.6%. However, the longer term returns haven't been so bad, with the stock down 14% in the last three years. The last week also saw the share price slip down another 12%. But this could be related to the soft market, which is down about 6.5% in the same period.

View our latest analysis for Prestige Estates Projects

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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Unhappily, Prestige Estates Projects had to report a 31% decline in EPS over the last year. This fall in the EPS is significantly worse than the 21% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Prestige Estates Projects' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered Prestige Estates Projects' 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 Prestige Estates Projects shareholders, and that cash payout explains why its total shareholder loss of 20%, over the last year, isn't as bad as the share price return.

A Different Perspective

While the broader market lost about 2.6% in the twelve months, Prestige Estates Projects shareholders did even worse, losing 20% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 2.3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Prestige Estates Projects better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Prestige Estates Projects (of which 1 is potentially serious!) you should know about.

We will like Prestige Estates Projects better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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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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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