How Much Did Wonderla Holidays'(NSE:WONDERLA) Shareholders Earn From Share Price Movements Over The Last Three Years?

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Wonderla Holidays Limited (NSE:WONDERLA) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 61% decline in the share price in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 46% lower in that time.

View our latest analysis for Wonderla Holidays

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.

During the unfortunate three years of share price decline, Wonderla Holidays actually saw its earnings per share (EPS) improve by 24% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

The modest 1.3% dividend yield is unlikely to be guiding the market view of the stock. With revenue flat over three years, it seems unlikely that the share price is reflecting the top line. There doesn't seem to be any clear correlation between the fundamental business metrics and the share price. That could mean that the stock was previously overrated, or it could spell opportunity now.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Wonderla Holidays' earnings, revenue and cash flow.

A Different Perspective

Investors in Wonderla Holidays had a tough year, with a total loss of 45% (including dividends), against a market gain of about 3.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8.3% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Wonderla Holidays better, we need to consider many other factors. Even so, be aware that Wonderla Holidays is showing 2 warning signs in our investment analysis , you should know about...

Wonderla Holidays is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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