Dutch Lady Milk Industries Berhad's (KLSE:DLADY) Shareholders Are Down 37% On Their Shares

As an investor its worth striving to ensure your overall portfolio beats the market average. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term Dutch Lady Milk Industries Berhad (KLSE:DLADY) shareholders, since the share price is down 37% in the last three years, falling well short of the market decline of around 1.0%. The more recent news is of little comfort, with the share price down 34% in a year. On the other hand the share price has bounced 6.7% over the last week.

See our latest analysis for Dutch Lady Milk Industries Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

Dutch Lady Milk Industries Berhad saw its EPS decline at a compound rate of 12% per year, over the last three years. This change in EPS is reasonably close to the 14% average annual decrease in the share price. So it seems like sentiment towards the stock hasn't changed all that much over time. Rather, the share price has approximately tracked EPS growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Dutch Lady Milk Industries Berhad's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Dutch Lady Milk Industries Berhad the TSR over the last 3 years was -32%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Investors in Dutch Lady Milk Industries Berhad had a tough year, with a total loss of 33% (including dividends), against a market gain of about 4.8%. 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 1.5% 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 1 warning sign for Dutch Lady Milk Industries Berhad you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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