How Much Did STEF's(EPA:STF) Shareholders Earn From Share Price Movements Over The Last Three Years?

STEF SA (EPA:STF) shareholders should be happy to see the share price up 14% in the last month. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 25% in the last three years, falling well short of the market return.

View our latest analysis for STEF

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

During the three years that the share price fell, STEF's earnings per share (EPS) dropped by 4.9% each year. The share price decline of 9% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past. This increased caution is also evident in the rather low P/E ratio, which is sitting at 11.78.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on STEF's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered STEF's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that STEF's TSR, which was a 19% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

While the broader market gained around 0.2% in the last year, STEF shareholders lost 18%. 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. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand STEF better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with STEF .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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