Kerjaya Prospek Property Berhad (KLSE:KPPROP) shareholders have lost 41% over 5 years, earnings decline likely the culprit

The main aim of stock picking is to find the market-beating stocks. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in Kerjaya Prospek Property Berhad (KLSE:KPPROP), since the last five years saw the share price fall 56%. We also note that the stock has performed poorly over the last year, with the share price down 56%. Shareholders have had an even rougher run lately, with the share price down 23% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

If the past week is anything to go by, investor sentiment for Kerjaya Prospek Property Berhad isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Looking back five years, both Kerjaya Prospek Property Berhad's share price and EPS declined; the latter at a rate of 61% per year. The impact of extraordinary items helps explain this. The share price decline of 15% per year isn't as bad as the EPS decline. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline. The high P/E ratio of 176.44 suggests that shareholders believe earnings will grow in the years ahead.

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

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What About The Total Shareholder Return (TSR)?

We've already covered Kerjaya Prospek Property Berhad'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. Dividends have been really beneficial for Kerjaya Prospek Property Berhad shareholders, and that cash payout explains why its total shareholder loss of 41%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

Investors in Kerjaya Prospek Property Berhad had a tough year, with a total loss of 46%, against a market gain of about 3.0%. 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. 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. It's always interesting to track share price performance over the longer term. But to understand Kerjaya Prospek Property Berhad better, we need to consider many other factors. For instance, we've identified 6 warning signs for Kerjaya Prospek Property Berhad (3 can't be ignored) that you should be aware of.

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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.