New Zealand King Salmon Investments (NZSE:NZK) Share Prices Have Dropped 28% In The Last Three Years

For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term New Zealand King Salmon Investments Limited (NZSE:NZK) shareholders, since the share price is down 28% in the last three years, falling well short of the market return of around 48%. The silver lining is that the stock is up 1.4% in about a week.

View our latest analysis for New Zealand King Salmon Investments

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

New Zealand King Salmon Investments saw its share price decline over the three years in which its EPS also dropped, falling to a loss. 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.

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

Dive deeper into New Zealand King Salmon Investments' key metrics by checking this interactive graph of New Zealand King Salmon Investments's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between New Zealand King Salmon Investments' 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. New Zealand King Salmon Investments' TSR of was a loss of 24% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Over the last year, New Zealand King Salmon Investments shareholders took a loss of 14%. In contrast the market gained about 40%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 7% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

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 NZ 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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