United Company RUSAL International's (HKG:486) earnings trajectory could turn positive as the stock lifts 5.5% this past week

United Company RUSAL, International Public Joint-Stock Company (HKG:486) shareholders should be happy to see the share price up 18% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 50% in the last three years, falling well short of the market return.

While the stock has risen 5.5% 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 United Company RUSAL International

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

During the three years that the share price fell, United Company RUSAL International's earnings per share (EPS) dropped by 28% each year. This fall in the EPS is worse than the 20% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

Dive deeper into United Company RUSAL International's key metrics by checking this interactive graph of United Company RUSAL International's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We've already covered United Company RUSAL International's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for United Company RUSAL International shareholders, and that cash payout explains why its total shareholder loss of 47%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

While the broader market lost about 4.6% in the twelve months, United Company RUSAL International shareholders did even worse, losing 25%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand United Company RUSAL International better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with United Company RUSAL International (including 1 which shouldn't be ignored) .

We will like United Company RUSAL International better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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