WCM Beteiligungs- und Grundbesitz-AG (ETR:WCMK) adds €33m to market cap in the past 7 days, though investors from five years ago are still down 46%

While not a mind-blowing move, it is good to see that the WCM Beteiligungs- und Grundbesitz-AG (ETR:WCMK) share price has gained 15% in the last three months. But if you look at the last five years the returns have not been good. After all, the share price is down 54% in that time, significantly under-performing the market.

While the stock has risen 11% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

See our latest analysis for WCM Beteiligungs- und Grundbesitz-AG

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 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.

Over five years WCM Beteiligungs- und Grundbesitz-AG's earnings per share dropped significantly, falling to a loss, with the share price also lower. This was, in part, due to extraordinary items impacting earnings. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.

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

This free interactive report on WCM Beteiligungs- und Grundbesitz-AG's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of WCM Beteiligungs- und Grundbesitz-AG, it has a TSR of -46% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

WCM Beteiligungs- und Grundbesitz-AG shareholders are down 40% for the year (even including dividends), but the market itself is up 3.2%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand WCM Beteiligungs- und Grundbesitz-AG better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with WCM Beteiligungs- und Grundbesitz-AG .

We will like WCM Beteiligungs- und Grundbesitz-AG 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 German 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.