F.I.L.A. - Fabbrica Italiana Lapis ed Affini (BIT:FILA) Share Prices Have Dropped 46% In The Last Three Years

F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A. (BIT:FILA) shareholders should be happy to see the share price up 18% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. Truth be told the share price declined 46% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

View our latest analysis for F.I.L.A. - Fabbrica Italiana Lapis ed Affini

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the three years that the share price fell, F.I.L.A. - Fabbrica Italiana Lapis ed Affini's earnings per share (EPS) dropped by 24% each year. This fall in the EPS is worse than the 18% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on F.I.L.A. - Fabbrica Italiana Lapis ed Affini's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between F.I.L.A. - Fabbrica Italiana Lapis ed Affini's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that F.I.L.A. - Fabbrica Italiana Lapis ed Affini's TSR, which was a 43% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

F.I.L.A. - Fabbrica Italiana Lapis ed Affini shareholders are up 21% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 0.5% endured over half a decade. 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. For instance, we've identified 3 warning signs for F.I.L.A. - Fabbrica Italiana Lapis ed Affini (1 makes us a bit uncomfortable) that 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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