Positive earnings growth hasn't been enough to get Grupa Azoty Zaklady Chemiczne Police (WSE:PCE) shareholders a favorable return over the last five years

Grupa Azoty Zaklady Chemiczne Police S.A. (WSE:PCE) shareholders should be happy to see the share price up 12% in the last week. But over the last half decade, the stock has not performed well. After all, the share price is down 37% in that time, significantly under-performing the market.

The recent uptick of 12% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Grupa Azoty Zaklady Chemiczne Police

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

While the share price declined over five years, Grupa Azoty Zaklady Chemiczne Police actually managed to increase EPS by an average of 5.3% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

Due to the lack of correlation between the EPS growth and the falling share price, it's worth taking a look at other metrics to try to understand the share price movement.

Revenue is actually up 11% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Grupa Azoty Zaklady Chemiczne Police's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We've already covered Grupa Azoty Zaklady Chemiczne Police's share price action, but we should also mention its total shareholder return (TSR). 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. Grupa Azoty Zaklady Chemiczne Police's TSR of was a loss of 26% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

It's good to see that Grupa Azoty Zaklady Chemiczne Police has rewarded shareholders with a total shareholder return of 1.2% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 5% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. Before forming an opinion on Grupa Azoty Zaklady Chemiczne Police you might want to consider these 3 valuation metrics.

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 Polish 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.