CTT - Correios De Portugal's (ELI:CTT) Stock Price Has Reduced 66% In The Past Five Years

We think intelligent long term investing is the way to go. But unfortunately, some companies simply don't succeed. To wit, the CTT - Correios De Portugal, S.A. (ELI:CTT) share price managed to fall 66% over five long years. That's not a lot of fun for true believers. The silver lining is that the stock is up 3.6% in about a week.

View our latest analysis for CTT - Correios De Portugal

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

During the five years over which the share price declined, CTT - Correios De Portugal's earnings per share (EPS) dropped by 32% each year. This fall in the EPS is worse than the 19% compound annual share price fall. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline.

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

It might be well worthwhile taking a look at our free report on CTT - Correios De Portugal's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered CTT - Correios De Portugal's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. CTT - Correios De Portugal's TSR of was a loss of 53% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

We regret to report that CTT - Correios De Portugal shareholders are down 9.5% for the year. Unfortunately, that's worse than the broader market decline of 2.3%. 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. Unfortunately, longer term shareholders are suffering worse, given the loss of 9% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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. To that end, you should be aware of the 3 warning signs we've spotted with CTT - Correios De Portugal .

But note: CTT - Correios De Portugal may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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