Despite delivering investors losses of 46% over the past 1 year, RBG Holdings (LON:RBGP) has been growing its earnings

RBG Holdings plc (LON:RBGP) shareholders will doubtless be very grateful to see the share price up 49% in the last month. But that doesn't change the reality of under-performance over the last twelve months. After all, the share price is down 47% in the last year, significantly under-performing the market.

While the stock has risen 22% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for RBG Holdings

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the unfortunate twelve months during which the RBG Holdings share price fell, it actually saw its earnings per share (EPS) improve by 13%. It's quite possible that growth expectations may have been unreasonable in the past.

The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.

The fact that the dividend has fallen is probably weighing on the share price, as it implies some form of business stress.

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for RBG Holdings in this interactive graph of future profit estimates.

A Different Perspective

The last twelve months weren't great for RBG Holdings shares, which cost holders 46%, including dividends, while the market was up about 2.1%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 6% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for RBG Holdings you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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