Investors five-year losses continue as Wiz Co Participações e Corretagem de Seguros (BVMF:WIZC3) dips a further 14% this week, earnings continue to decline

For many, the main point of investing is to generate higher returns than the overall market. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term Wiz Co Participações e Corretagem de Seguros S.A. (BVMF:WIZC3) shareholders for doubting their decision to hold, with the stock down 51% over a half decade. And some of the more recent buyers are probably worried, too, with the stock falling 29% in the last year. The falls have accelerated recently, with the share price down 16% in the last three months.

If the past week is anything to go by, investor sentiment for Wiz Co Participações e Corretagem de Seguros isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Wiz Co Participações e Corretagem de Seguros

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Looking back five years, both Wiz Co Participações e Corretagem de Seguros' share price and EPS declined; the latter at a rate of 0.9% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 13% per year, over the period. This implies that the market was previously too optimistic about the stock. The less favorable sentiment is reflected in its current P/E ratio of 5.97.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Wiz Co Participações e Corretagem de Seguros' key metrics by checking this interactive graph of Wiz Co Participações e Corretagem de Seguros's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Wiz Co Participações e Corretagem de Seguros' TSR for the last 5 years was -25%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the broader market lost about 13% in the twelve months, Wiz Co Participações e Corretagem de Seguros shareholders did even worse, losing 23% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. For example, we've discovered 1 warning sign for Wiz Co Participações e Corretagem de Seguros that you should be aware of before investing here.

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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.