F.I.L.A. - Fabbrica Italiana Lapis ed Affini's (BIT:FILA) Shareholders Are Down 54% On Their Shares

F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A. (BIT:FILA) shareholders should be happy to see the share price up 16% in the last quarter. But over the last three years we've seen a quite serious decline. Regrettably, the share price slid 54% in that period. Some might say the recent bounce is to be expected after such a bad drop. While many would remain nervous, there could be further gains if the business can put its best foot forward.

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

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 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, F.I.L.A. - Fabbrica Italiana Lapis ed Affini's earnings per share (EPS) dropped by 24% each year. The 23% average annual share price decline is remarkably close to the EPS decline. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. In this case, it seems that the EPS is guiding the share price.

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

Dive deeper into F.I.L.A. - Fabbrica Italiana Lapis ed Affini's key metrics by checking this interactive graph of F.I.L.A. - Fabbrica Italiana Lapis ed Affini's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered F.I.L.A. - Fabbrica Italiana Lapis ed Affini's share price action, but we should also mention its total shareholder return (TSR). 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 52% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

While the broader market lost about 7.5% in the twelve months, F.I.L.A. - Fabbrica Italiana Lapis ed Affini shareholders did even worse, losing 42%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. 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. 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 example, we've discovered 4 warning signs for F.I.L.A. - Fabbrica Italiana Lapis ed Affini (1 is concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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