If You Had Bought Selangor Dredging Berhad's (KLSE:SDRED) Shares Five Years Ago You Would Be Down 44%

While it may not be enough for some shareholders, we think it is good to see the Selangor Dredging Berhad (KLSE:SDRED) share price up 12% in a single quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 44% in that time, significantly under-performing the market.

Check out our latest analysis for Selangor Dredging Berhad

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 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).

Over five years Selangor Dredging Berhad's earnings per share dropped significantly, falling to a loss, with the share price also lower. At present it's hard to make valid comparisons between EPS and the share price. But we would generally expect a lower price, given the situation.

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

It might be well worthwhile taking a look at our free report on Selangor Dredging Berhad's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Selangor Dredging Berhad's share price action, but we should also mention its total shareholder return (TSR). 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. Selangor Dredging Berhad's TSR of was a loss of 25% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Selangor Dredging Berhad shareholders are down 7.0% for the year, but the market itself is up 6.6%. 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 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. Even so, be aware that Selangor Dredging Berhad is showing 3 warning signs in our investment analysis , and 2 of those are potentially serious...

Of course Selangor Dredging Berhad may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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