Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's(WSE:PKO) Share Price Is Down 33% Over The Past Three Years.

Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna (WSE:PKO) shareholders will doubtless be very grateful to see the share price up 31% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. After all, the share price is down 33% in the last three years, significantly under-performing the market.

View our latest analysis for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the three years that the share price fell, Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's earnings per share (EPS) dropped by 1.6% each year. This reduction in EPS is slower than the 13% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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

What about the Total Shareholder Return (TSR)?

We've already covered Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna'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. Dividends have been really beneficial for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna shareholders, and that cash payout explains why its total shareholder loss of 30%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

We regret to report that Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna shareholders are down 21% for the year. Unfortunately, that's worse than the broader market decline of 2.2%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 2%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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 risks, for instance. Every company has them, and we've spotted 2 warning signs for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on PL 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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