As Armac Locação Logística e Serviços (BVMF:ARML3) ascends 7.3% this past week, investors may now be noticing the company's one-year earnings growth

While not a mind-blowing move, it is good to see that the Armac Locação, Logística e Serviços S.A. (BVMF:ARML3) share price has gained 19% in the last three months. But in truth the last year hasn't been good for the share price. After all, the share price is down 11% in the last year, significantly under-performing the market.

The recent uptick of 7.3% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Armac Locação Logística e Serviços

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

During the unfortunate twelve months during which the Armac Locação Logística e Serviços share price fell, it actually saw its earnings per share (EPS) improve by 97%. Of course, the situation might betray previous over-optimism about growth.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.

Given the yield is quite low, at 1.7%, we doubt the dividend can shed much light on the share price. Armac Locação Logística e Serviços' revenue is actually up 96% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that Armac Locação Logística e Serviços has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Armac Locação Logística e Serviços' balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Armac Locação Logística e Serviços, it has a TSR of -8.6% for the last 1 year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Given that the market gained 6.6% in the last year, Armac Locação Logística e Serviços shareholders might be miffed that they lost 8.6% (even including dividends). While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 19%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Armac Locação Logística e Serviços (2 make us uncomfortable!) that you should be aware of before investing here.

But note: Armac Locação Logística e Serviços 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 Brazilian 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.