If You Had Bought Bakkavor Group's (LON:BAKK) Shares Three Years Ago You Would Be Down 61%

Bakkavor Group plc (LON:BAKK) shareholders will doubtless be very grateful to see the share price up 37% in the last quarter. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 61% in that time. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

See our latest analysis for Bakkavor Group

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).

Bakkavor Group saw its EPS decline at a compound rate of 2.6% per year, over the last three years. This reduction in EPS is slower than the 27% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Bakkavor Group's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Bakkavor Group shareholders, and that cash payout explains why its total shareholder loss of 58%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

The last twelve months weren't great for Bakkavor Group shares, which performed worse than the market, costing holders 39%. Meanwhile, the broader market slid about 5.1%, likely weighing on the stock. The three-year loss of 17% 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. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. Take risks, for example - Bakkavor Group has 4 warning signs we think you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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