How Much Did Vitro. de's(BMV:VITROA) Shareholders Earn From Share Price Movements Over The Last Three Years?

While not a mind-blowing move, it is good to see that the Vitro, S.A.B. de C.V. (BMV:VITROA) share price has gained 30% in the last three months. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 57%. So it's good to see it climbing back up. Perhaps the company has turned over a new leaf.

View our latest analysis for Vitro. de

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the three years that the share price fell, Vitro. de's earnings per share (EPS) dropped by 38% each year. This fall in the EPS is worse than the 25% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

This free interactive report on Vitro. de'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 Vitro. de's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Vitro. de's TSR of was a loss of 55% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Vitro. de shareholders are down 28% for the year, but the market itself is up 1.4%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. 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. Case in point: We've spotted 2 warning signs for Vitro. de you should be aware of, and 1 of them is potentially serious.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

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