Reflecting on Isetan (Singapore)'s (SGX:I15) Share Price Returns Over The Last Year

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Isetan (Singapore) Limited (SGX:I15) have tasted that bitter downside in the last year, as the share price dropped 40%. That's disappointing when you consider the market declined 9.2%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 21% in three years. The silver lining is that the stock is up 1.7% in about a week.

See our latest analysis for Isetan (Singapore)

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.

Unhappily, Isetan (Singapore) had to report a 141% decline in EPS over the last year. Readers should not this outcome was influenced by the impact of extraordinary items on EPS. In fact, it actually made a loss over the last twelve months. This fall in the EPS is significantly worse than the 40% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It might be well worthwhile taking a look at our free report on Isetan (Singapore)'s earnings, revenue and cash flow.

A Different Perspective

We regret to report that Isetan (Singapore) shareholders are down 39% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 9.2%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. 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. 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. Case in point: We've spotted 2 warning signs for Isetan (Singapore) you should be aware of, and 1 of them can't be ignored.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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