The five-year decline in earnings might be taking its toll on Lingkaran Trans Kota Holdings Berhad (KLSE:LITRAK) shareholders as stock falls 90% over the past week

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more -- or less -- than that. The Lingkaran Trans Kota Holdings Berhad (KLSE:LITRAK) stock price is down 92% over five years, but the total shareholder return is 19% once you include the dividend. That's better than the market which declined 1.5% over the same time. On top of that, the share price is down 90% in the last week. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

With the stock having lost 90% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out the opportunities and risks within the MY Infrastructure industry.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years over which the share price declined, Lingkaran Trans Kota Holdings Berhad's earnings per share (EPS) dropped by 6.3% each year. This reduction in EPS is less than the 39% annual reduction in the share price. This implies that the market is more cautious about the business these days. The less favorable sentiment is reflected in its current P/E ratio of 1.66.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Lingkaran Trans Kota Holdings Berhad the TSR over the last 5 years was 19%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Lingkaran Trans Kota Holdings Berhad shareholders have received a total shareholder return of 48% over the last year. And that does include the dividend. That's better than the annualised return of 4% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. To that end, you should be aware of the 2 warning signs we've spotted with Lingkaran Trans Kota Holdings Berhad .

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 MY 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.