WiseChip Semiconductor's (GTSM:5245) Stock Price Has Reduced 69% In The Past Three Years

This week we saw the WiseChip Semiconductor Inc. (GTSM:5245) share price climb by 15%. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 69%. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

Check out our latest analysis for WiseChip Semiconductor

There is no denying that markets are sometimes efficient, but prices do not always reflect 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 three years that the share price fell, WiseChip Semiconductor's earnings per share (EPS) dropped by 40% each year. In comparison the 32% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

Dive deeper into WiseChip Semiconductor's key metrics by checking this interactive graph of WiseChip Semiconductor's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, WiseChip Semiconductor's TSR for the last 3 years was -65%, 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

WiseChip Semiconductor shareholders gained a total return of 19% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 7% endured over half a decade. It could well be that the business is stabilizing. 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. Even so, be aware that WiseChip Semiconductor is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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

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