Market is not liking Albaad Massuot Yitzhak's (TLV:ALBA) earnings decline as stock retreats 13% this week

For many investors, the main point of stock picking is to generate higher returns than the overall market. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Albaad Massuot Yitzhak Ltd (TLV:ALBA) shareholders have had that experience, with the share price dropping 39% in three years, versus a market return of about 21%. The last week also saw the share price slip down another 13%. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

With the stock having lost 13% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Albaad Massuot Yitzhak

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Albaad Massuot Yitzhak saw its EPS decline at a compound rate of 27% per year, over the last three years. This fall in the EPS is worse than the 15% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Albaad Massuot Yitzhak's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We've already covered Albaad Massuot Yitzhak's share price action, but we should also mention its total shareholder return (TSR). 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. Albaad Massuot Yitzhak's TSR of was a loss of 24% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Albaad Massuot Yitzhak provided a TSR of 12% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 5% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. 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 - Albaad Massuot Yitzhak has 2 warning signs (and 1 which is concerning) we think you should know about.

We will like Albaad Massuot Yitzhak better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Israeli 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.