Multi Retail Group's (TLV:MRG) one-year decline in earnings translates into losses for shareholders

Multi Retail Group Ltd (TLV:MRG) shareholders should be happy to see the share price up 15% in the last month. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 17% in a year, falling short of the returns you could get by investing in an index fund.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Multi Retail Group

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Unhappily, Multi Retail Group had to report a 65% decline in EPS over the last year. The share price fall of 17% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

Dive deeper into Multi Retail Group's key metrics by checking this interactive graph of Multi Retail Group's earnings, revenue and cash flow.

A Different Perspective

While Multi Retail Group shareholders are down 15% for the year (even including dividends), the market itself is up 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 2.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand Multi Retail Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Multi Retail Group , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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