Constellium (NYSE:CSTM) earnings and shareholder returns have been trending downwards for the last year, but the stock climbs 3.8% this past week

The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Constellium SE (NYSE:CSTM) have tasted that bitter downside in the last year, as the share price dropped 42%. That contrasts poorly with the market return of 26%. We note that it has not been easy for shareholders over three years, either; the share price is down 40% in that time. Shareholders have had an even rougher run lately, with the share price down 28% in the last 90 days.

While the last year has been tough for Constellium shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for Constellium

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Constellium had to report a 31% decline in EPS over the last year. This reduction in EPS is not as bad as the 42% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

Constellium shareholders are down 42% for the year, but the market itself is up 26%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% 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. 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. To that end, you should learn about the 2 warning signs we've spotted with Constellium (including 1 which makes us a bit uncomfortable) .

But note: Constellium may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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