Would Shareholders Who Purchased AURELIUS Equity Opportunities SE KGaA's (ETR:AR4) Stock Three Years Be Happy With The Share price Today?

AURELIUS Equity Opportunities SE & Co. KGaA (ETR:AR4) shareholders should be happy to see the share price up 13% in the last month. But over the last three years we've seen a quite serious decline. Regrettably, the share price slid 68% in that period. So it's good to see it climbing back up. Perhaps the company has turned over a new leaf.

View our latest analysis for AURELIUS Equity Opportunities SE KGaA

AURELIUS Equity Opportunities SE KGaA wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, AURELIUS Equity Opportunities SE KGaA saw its revenue grow by 6.6% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 19% for the last three years. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling AURELIUS Equity Opportunities SE KGaA stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of AURELIUS Equity Opportunities SE KGaA, it has a TSR of -62% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Investors in AURELIUS Equity Opportunities SE KGaA had a tough year, with a total loss of 34% (including dividends), against a market gain of about 14%. 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. 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. It's always interesting to track share price performance over the longer term. But to understand AURELIUS Equity Opportunities SE KGaA better, we need to consider many other factors. Even so, be aware that AURELIUS Equity Opportunities SE KGaA is showing 4 warning signs in our investment analysis , and 3 of those make us uncomfortable...

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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 DE exchanges.

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This article by Simply Wall St is general in nature. 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.
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