Shareholders in AT & S Austria Technologie & Systemtechnik (VIE:ATS) have lost 39%, as stock drops 10% this past week

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by AT & S Austria Technologie & Systemtechnik Aktiengesellschaft (VIE:ATS) shareholders over the last year, as the share price declined 40%. That falls noticeably short of the market decline of around 4.8%. Even if you look out three years, the returns are still disappointing, with the share price down31% in that time. Shareholders have had an even rougher run lately, with the share price down 30% in the last 90 days.

Since AT & S Austria Technologie & Systemtechnik has shed €77m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for AT & S Austria Technologie & Systemtechnik

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 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.

AT & S Austria Technologie & Systemtechnik fell to a loss making position during the year. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. Of course, if the company can turn the situation around, investors will likely profit.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market gained around 4.8% in the last year, AT & S Austria Technologie & Systemtechnik shareholders lost 39% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with AT & S Austria Technologie & Systemtechnik (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Austrian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.