Strong week for Top Glove Corporation Bhd (KLSE:TOPGLOV) shareholders doesn't alleviate pain of three-year loss

Top Glove Corporation Bhd. (KLSE:TOPGLOV) shareholders are doubtless heartened to see the share price bounce 31% in just one week. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 56% in the last three years, falling well short of the market return.

While the stock has risen 31% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Top Glove Corporation Bhd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

Top Glove Corporation Bhd 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. However, we can say we'd expect to see a falling share price in this scenario.

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

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Top Glove Corporation Bhd'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 Top Glove Corporation Bhd's TSR, which was a 49% drop over the last 3 years, was not as bad as the share price return.

A Different Perspective

We regret to report that Top Glove Corporation Bhd shareholders are down 49% for the year. Unfortunately, that's worse than the broader market decline of 4.9%. 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 6% 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. It's always interesting to track share price performance over the longer term. But to understand Top Glove Corporation Bhd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Top Glove Corporation Bhd .

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 Malaysian 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.