Yahoo Finance If You Had Bought Miquel y Costas & Miquel (BME:MCM) Stock Three Years Ago, You'd Be Sitting On A 37% Loss, Today
You can invest in an index fund if you want to make sure your returns approximately match the overall market. But in any given year a good portion of stocks will fall short of that. The Miquel y Costas & Miquel, S.A. (BME:MCM) is such an example; over three years its share price is down 37% versus a market return of -31%. And more recent buyers are having a tough time too, with a drop of 34% in the last year. The falls have accelerated recently, with the share price down 31% in the last three months. Of course, this share price action may well have been influenced by the 35% decline in the broader market, throughout the period.
See our latest analysis for Miquel y Costas & Miquel
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).
Although the share price is down over three years, Miquel y Costas & Miquel actually managed to grow EPS by 7.7% per year in that time. 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.
It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.
We note that, in three years, revenue has actually grown at a 5.7% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating Miquel y Costas & Miquel further; while we may be missing something on this analysis, there might also be an opportunity.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think Miquel y Costas & Miquel will earn in the future (free profit 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 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Miquel y Costas & Miquel the TSR over the last 3 years was -33%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Miquel y Costas & Miquel shareholders are down 33% over twelve months (even including dividends) , which isn't far from the market return of -31%. The silver lining is that longer term investors would have made a total return of 0.6% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand Miquel y Costas & Miquel better, we need to consider many other factors. Take risks, for example - Miquel y Costas & Miquel has 3 warning signs we think you should be aware of.
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 ES exchanges.
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.
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. Thank you for reading.
