ASUSTeK Computer (TPE:2357) Share Prices Have Dropped 10% In The Last Three Years

As an investor its worth striving to ensure your overall portfolio beats the market average. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term ASUSTeK Computer Inc. (TPE:2357) shareholders, since the share price is down 10% in the last three years, falling well short of the market return of around 51%. There was little comfort for shareholders in the last week as the price declined a further 2.0%.

View our latest analysis for ASUSTeK Computer

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.

During the unfortunate three years of share price decline, ASUSTeK Computer actually saw its earnings per share (EPS) improve by 4.5% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

Given that EPS is up and the share price is down, it seems clear the market is less excited about the business than it was. Of course, this could spell opportunity because if the EPS growth continues long term, it seems very likely the share price will rise too.

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

We know that ASUSTeK Computer has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for ASUSTeK Computer the TSR over the last 3 years was 7.4%, 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

ASUSTeK Computer shareholders gained a total return of 12% during the year. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 4% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand ASUSTeK Computer better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for ASUSTeK Computer you should be aware of.

Of course ASUSTeK Computer 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 TW 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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