Investors five-year losses continue as ASA International Group (LON:ASAI) dips a further 11% this week, earnings continue to decline

We think intelligent long term investing is the way to go. But no-one is immune from buying too high. For example, after five long years the ASA International Group PLC (LON:ASAI) share price is a whole 70% lower. That's an unpleasant experience for long term holders. The last week also saw the share price slip down another 11%.

Since ASA International Group has shed UK£9.3m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for ASA International Group

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 five years over which the share price declined, ASA International Group's earnings per share (EPS) dropped by 2.1% each year. This reduction in EPS is less than the 21% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 4.93.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

We're pleased to report that ASA International Group shareholders have received a total shareholder return of 25% over one year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand ASA International Group better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for ASA International Group you should be aware of, and 1 of them doesn't sit too well with us.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.