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Some Autogrill (BIT:AGL) Shareholders Are Down 25%

While it may not be enough for some shareholders, we think it is good to see the Autogrill S.p.A. (BIT:AGL) share price up 14% in a single quarter. But in truth the last year hasn’t been good for the share price. In fact, the price has declined 25% in a year, falling short of the returns you could get by investing in an index fund.

See our latest analysis for Autogrill

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.

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Unfortunately Autogrill reported an EPS drop of 2.0% for the last year. The share price decline of 25% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.

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

BIT:AGL Past and Future Earnings, March 18th 2019
BIT:AGL Past and Future Earnings, March 18th 2019

It’s good to see that there was some significant insider buying in the last three months. That’s a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What about the Total Shareholder Return (TSR)?

Investors should note that there’s a difference between Autogrill’s total shareholder return (TSR) and its share price change, which we’ve covered above. 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. Autogrill’s TSR of was a loss of 24% for the year. That wasn’t as bad as its share price return, because it has paid dividends.

A Different Perspective

While the broader market lost about 4.0% in the twelve months, Autogrill shareholders did even worse, losing 24% (even including dividends). 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. Longer term investors wouldn’t be so upset, since they would have made 3.2%, each year, over five years. 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. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Autogrill by clicking this link.

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 IT exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.