The one-year shareholder returns and company earnings persist lower as Scandi Standard (STO:SCST) stock falls a further 15% in past week

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Scandi Standard AB (publ) (STO:SCST) share price slid 35% over twelve months. That's well below the market return of 30%. At least the damage isn't so bad if you look at the last three years, since the stock is down 18% in that time. More recently, the share price has dropped a further 25% in a month.

Since Scandi Standard has shed kr513m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Scandi Standard

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

Unhappily, Scandi Standard had to report a 15% decline in EPS over the last year. The share price decline of 35% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Scandi Standard's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 30% in the last year, Scandi Standard shareholders lost 34% (even including dividends). 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 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. For instance, we've identified 3 warning signs for Scandi Standard that you should be aware of.

Scandi Standard is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

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.

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