The one-year shareholder returns and company earnings persist lower as Lojas Quero-Quero (BVMF:LJQQ3) stock falls a further 17% in past week

Lojas Quero-Quero S.A. (BVMF:LJQQ3) shareholders should be happy to see the share price up 18% in the last month. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 45% in one year, under-performing the market.

Since Lojas Quero-Quero has shed R$358m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Lojas Quero-Quero

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unfortunately Lojas Quero-Quero reported an EPS drop of 12% for the last year. This reduction in EPS is not as bad as the 45% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

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

It is of course excellent to see how Lojas Quero-Quero has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We doubt Lojas Quero-Quero shareholders are happy with the loss of 44% over twelve months. That falls short of the market, which lost 5.2%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 1.5%, 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. Take risks, for example - Lojas Quero-Quero has 2 warning signs (and 1 which can't be ignored) we think you should know about.

We will like Lojas Quero-Quero 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 BR 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.