Neways Electronics International (AMS:NEWAY) Share Prices Have Dropped 42% In The Last Three Years

Neways Electronics International N.V. (AMS:NEWAY) shareholders should be happy to see the share price up 23% in the last month. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 42% in the last three years, falling well short of the market return.

See our latest analysis for Neways Electronics International

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

Neways Electronics International saw its EPS decline at a compound rate of 27% per year, over the last three years. This fall in the EPS is worse than the 16% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

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

Dive deeper into Neways Electronics International's key metrics by checking this interactive graph of Neways Electronics International's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Neways Electronics International's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Neways Electronics International's TSR of was a loss of 38% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Neways Electronics International shareholders are up 4.8% for the year. But that return falls short of the market. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 8% over five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Neways Electronics International , and understanding them should be part of your investment process.

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 NL 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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