Prima Industrie's (BIT:PRI) Stock Price Has Reduced 55% In The Past Three Years

Prima Industrie SpA (BIT:PRI) shareholders should be happy to see the share price up 16% in the last month. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 55% in the last three years. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.

See our latest analysis for Prima Industrie

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.

Prima Industrie saw its EPS decline at a compound rate of 60% per year, over the last three years. This fall in the EPS is worse than the 23% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines. With a P/E ratio of 164.51, it's fair to say the market sees a brighter future for the business.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Prima Industrie's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Prima Industrie has rewarded shareholders with a total shareholder return of 1.4% in the last twelve months. However, the TSR over five years, coming in at 9% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand Prima Industrie better, we need to consider many other factors. Take risks, for example - Prima Industrie has 4 warning signs we think you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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