Sedlmayr Grund und Immobilien (FRA:SPB investor five-year losses grow to 58% as the stock sheds €147m this past week

We think intelligent long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. Zooming in on an example, the Sedlmayr Grund und Immobilien AG (FRA:SPB) share price dropped 62% in the last half decade. That is extremely sub-optimal, to say the least. The falls have accelerated recently, with the share price down 22% in the last three months.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Sedlmayr Grund und Immobilien, it has a TSR of -58% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Sedlmayr Grund und Immobilien provided a TSR of 14% over the year (including dividends). That's fairly close to the broader market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 10%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Sedlmayr Grund und Immobilien. 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. For example, we've discovered 3 warning signs for Sedlmayr Grund und Immobilien (2 shouldn't be ignored!) that you should be aware of before investing here.

Of course Sedlmayr Grund und Immobilien may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.