Watches of Switzerland Group's (LON:WOSG) earnings trajectory could turn positive as the stock hikes 11% this past week

It is a pleasure to report that the Watches of Switzerland Group PLC (LON:WOSG) is up 38% in the last quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 55% in the last three years. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.

The recent uptick of 11% could be a positive sign of things to come, so let's take a look at historical fundamentals.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

Watches of Switzerland Group saw its EPS decline at a compound rate of 19% per year, over the last three years. This reduction in EPS is slower than the 24% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Watches of Switzerland Group's earnings, revenue and cash flow.

A Different Perspective

Watches of Switzerland Group provided a TSR of 0.7% over the last twelve months. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 1.1% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Watches of Switzerland Group better, we need to consider many other factors. Take risks, for example - Watches of Switzerland Group has 1 warning sign we think you should be aware of.

Watches of Switzerland Group is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been 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.