CHC Healthcare Group (TWSE:4164) stock falls 12% in past week as one-year earnings and shareholder returns continue downward trend

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by CHC Healthcare Group (TWSE:4164) shareholders over the last year, as the share price declined 25%. That's well below the market return of 28%. The silver lining (for longer term investors) is that the stock is still 22% higher than it was three years ago. Shareholders have had an even rougher run lately, with the share price down 21% in the last 90 days.

Since CHC Healthcare Group has shed NT$967m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for CHC Healthcare Group

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unhappily, CHC Healthcare Group had to report a 11% decline in EPS over the last year. This reduction in EPS is not as bad as the 25% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.

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

This free interactive report on CHC Healthcare Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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. As it happens, CHC Healthcare Group's TSR for the last 1 year was -22%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Investors in CHC Healthcare Group had a tough year, with a total loss of 22% (including dividends), against a market gain of about 28%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand CHC Healthcare Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for CHC Healthcare Group that you should be aware of before investing here.

We will like CHC Healthcare Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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

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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.