The five-year shareholder returns and company earnings persist lower as Amper (BME:AMP) stock falls a further 12% in past week

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Amper, S.A. (BME:AMP) share price dropped 65% over five years. That's an unpleasant experience for long term holders. We also note that the stock has performed poorly over the last year, with the share price down 46%. Unfortunately the share price momentum is still quite negative, with prices down 16% in thirty days.

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

View our latest analysis for Amper

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

During the five years over which the share price declined, Amper's earnings per share (EPS) dropped by 0.2% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 19% per year, over the period. This implies that the market was previously too optimistic about the stock.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Amper's key metrics by checking this interactive graph of Amper's earnings, revenue and cash flow.

A Different Perspective

Investors in Amper had a tough year, with a total loss of 46%, against a market gain of about 18%. 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 11% 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. Case in point: We've spotted 4 warning signs for Amper you should be aware of, and 1 of them is a bit unpleasant.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Spanish 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.