What Type Of Returns Would Shalby's(NSE:SHALBY) Shareholders Have Earned If They Purchased Their SharesThree Years Ago?

While it may not be enough for some shareholders, we think it is good to see the Shalby Limited (NSE:SHALBY) share price up 12% in a single quarter. But that doesn't change the fact that the returns over the last three years have been disappointing. Indeed, the share price is down a tragic 51% in the last three years. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

See our latest analysis for Shalby

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 three years that the share price fell, Shalby's earnings per share (EPS) dropped by 17% each year. The share price decline of 21% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. Of course, with a P/E ratio of 75.56, the market remains optimistic.

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

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

A Different Perspective

Over the last year Shalby shareholders have received a TSR of 16%. While you don't go broke making a profit, this return was actually lower than the average market return of about 27%. The silver lining is that the recent rise is far preferable to the annual loss of 15% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Shalby you should know about.

We will like Shalby 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 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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