Reflecting on Teixeira Duarte's (ELI:TDSA) Share Price Returns Over The Last Three Years

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Teixeira Duarte, S.A. (ELI:TDSA) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 67% in that time. And over the last year the share price fell 41%, so we doubt many shareholders are delighted. But it's up 8.0% in the last week. The buoyant market could have helped drive the share price pop, since stocks are up 8.2% in the same period.

View our latest analysis for Teixeira Duarte

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the three years that the share price declined, Teixeira Duarte's earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

Teixeira Duarte shareholders are down 41% for the year, but the market itself is up 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Teixeira Duarte better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Teixeira Duarte (of which 2 are concerning!) 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 PT 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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