EcoRodovias Infraestrutura e Logística (BVMF:ECOR3) shareholders are up 7.9% this past week, but still in the red over the last five years

It is doubtless a positive to see that the EcoRodovias Infraestrutura e Logística S.A. (BVMF:ECOR3) share price has gained some 41% in the last three months. But if you look at the last five years the returns have not been good. In fact, the share price is down 46%, which falls well short of the return you could get by buying an index fund.

While the last five years has been tough for EcoRodovias Infraestrutura e Logística shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

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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. 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.

During five years of share price growth, EcoRodovias Infraestrutura e Logística moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics may better explain the share price move.

Revenue is actually up 23% over the time period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that EcoRodovias Infraestrutura e Logística has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at EcoRodovias Infraestrutura e Logística's financial health with this free report on its balance sheet .

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between EcoRodovias Infraestrutura e Logística's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that EcoRodovias Infraestrutura e Logística's TSR, which was a 43% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

While the broader market gained around 1.1% in the last year, EcoRodovias Infraestrutura e Logística shareholders lost 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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 instance, we've identified 3 warning signs for EcoRodovias Infraestrutura e Logística (2 shouldn't be ignored) that you should be aware of.

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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.