Salvatore Ferragamo (BIT:SFER shareholders incur further losses as stock declines 5.3% this week, taking three-year losses to 68%

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Salvatore Ferragamo S.p.A. (BIT:SFER) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 69% in that time. The more recent news is of little comfort, with the share price down 41% in a year.

After losing 5.3% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

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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.

Salvatore Ferragamo saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

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

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

A Different Perspective

Investors in Salvatore Ferragamo had a tough year, with a total loss of 41%, against a market gain of about 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

We will like Salvatore Ferragamo better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Italian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.