The Amara Holdings (SGX:A34) Share Price Is Down 20% So Some Shareholders Are Getting Worried
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Ideally, your overall portfolio should beat the market average. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in Amara Holdings Limited (SGX:A34), since the last five years saw the share price fall 20%. Unfortunately the share price momentum is still quite negative, with prices down 9.9% in thirty days. We do note, however, that the broader market is down 5.7% in that period, and this may have weighed on the share price.
Check out our latest analysis for Amara Holdings
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 unfortunate half decade during which the share price slipped, Amara Holdings actually saw its earnings per share (EPS) improve by 5.2% per year. So it doesn't seem like EPS is a great guide to understanding how the market is valuing the stock. Alternatively, growth expectations may have been unreasonable in the past. It's strange to see such muted share price performance despite sustained growth. Perhaps a clue lies in other metrics.
In contrast to the share price, revenue has actually increased by 6.6% a year in the five year 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.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We know that Amara Holdings has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Amara Holdings
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Amara Holdings the TSR over the last 5 years was -6.1%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
The total return of 5.0% received by Amara Holdings shareholders over the last year isn't far from the market return of -4.8%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 1.2% per year over the last five years. Weak performance over the long term usually destroys market confidence in a stock, but bargain hunters may want to take a closer look for signs of a turnaround. Is Amara Holdings cheap compared to other companies? These 3 valuation measures might help you decide.
Of course Amara Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SG exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.