Investors who have held Jutal Offshore Oil Services (HKG:3303) over the last three years have watched its earnings decline along with their investment

This week we saw the Jutal Offshore Oil Services Limited (HKG:3303) share price climb by 12%. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 51% in the last three years, significantly under-performing the market.

On a more encouraging note the company has added HK$109m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

See our latest analysis for Jutal Offshore Oil Services

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Jutal Offshore Oil Services became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So it's worth looking at other metrics to try to understand the share price move.

We think that the revenue decline over three years, at a rate of 22% per year, probably had some shareholders looking to sell. After all, if revenue keeps shrinking, it may be difficult to find earnings growth in the future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Jutal Offshore Oil Services' financial health with this free report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We've already covered Jutal Offshore Oil Services' 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. We note that Jutal Offshore Oil Services' TSR, at -41% is higher than its share price return of -51%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

It's good to see that Jutal Offshore Oil Services has rewarded shareholders with a total shareholder return of 24% in the last twelve months. That certainly beats the loss of about 1.1% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Take risks, for example - Jutal Offshore Oil Services has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course Jutal Offshore Oil Services may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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