Stock Analysis

Overseas Commerce's (TLV:OVRS) Stock Price Has Reduced 35% In The Past Three Years

TASE:OVRS
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Overseas Commerce Ltd. (TLV:OVRS) shareholders should be happy to see the share price up 23% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. Truth be told the share price declined 35% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

Check out our latest analysis for Overseas Commerce

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Overseas Commerce saw its EPS decline at a compound rate of 5.7% per year, over the last three years. The share price decline of 13% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 10.43.

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

earnings-per-share-growth
TASE:OVRS Earnings Per Share Growth February 19th 2021

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

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Overseas Commerce's total shareholder return (TSR) and its share price change, which we've covered above. 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 Overseas Commerce shareholders, and that cash payout explains why its total shareholder loss of 27%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

It's nice to see that Overseas Commerce shareholders have gained 37% (in total) over the last year. This recent result is much better than the 8% drop suffered by shareholders each year (on average) over the last three. It could well be that the business has turned around -- or else regained the confidence of investors. It's always interesting to track share price performance over the longer term. But to understand Overseas Commerce better, we need to consider many other factors. For instance, we've identified 4 warning signs for Overseas Commerce (2 can't be ignored) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. 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.
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