SkyCity Entertainment Group (NZSE:SKC shareholders incur further losses as stock declines 9.9% this week, taking three-year losses to 56%

The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term SkyCity Entertainment Group Limited (NZSE:SKC) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 60% drop in the share price over that period. And the ride hasn't got any smoother in recent times over the last year, with the price 39% lower in that time. Unfortunately the share price momentum is still quite negative, with prices down 19% in thirty days. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

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

See our latest analysis for SkyCity Entertainment Group

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

Over the three years that the share price declined, SkyCity Entertainment Group's earnings per share (EPS) dropped significantly, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

This free interactive report on SkyCity Entertainment Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between SkyCity Entertainment Group's total shareholder return (TSR) and its share price change, which we've covered above. 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. Dividends have been really beneficial for SkyCity Entertainment Group shareholders, and that cash payout explains why its total shareholder loss of 56%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

Investors in SkyCity Entertainment Group had a tough year, with a total loss of 39%, against a market gain of about 5.9%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.7% 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. 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. Take risks, for example - SkyCity Entertainment Group has 1 warning sign we think you should be aware of.

Of course SkyCity Entertainment Group 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 New Zealander 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.