Yahoo Finance Investors Who Bought Semapa - Sociedade de Investimento e Gestão SGPS (ELI:SEM) Shares A Year Ago Are Now Down 26%
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. That downside risk was realized by Semapa - Sociedade de Investimento e Gestão, SGPS, S.A. (ELI:SEM) shareholders over the last year, as the share price declined 26%. That falls noticeably short of the market return of around 12%. At least the damage isn't so bad if you look at the last three years, since the stock is down 16% in that time. Shareholders have had an even rougher run lately, with the share price down 17% in the last 90 days. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Check out our latest analysis for Semapa - Sociedade de Investimento e Gestão SGPS
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Unhappily, Semapa - Sociedade de Investimento e Gestão SGPS had to report a 6.1% decline in EPS over the last year. This reduction in EPS is not as bad as the 26% share price fall. So it seems the market was too confident about the business, a year ago. The P/E ratio of 7.40 also points to the negative market sentiment.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Semapa - Sociedade de Investimento e Gestão SGPS, it has a TSR of -23% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While the broader market gained around 12% in the last year, Semapa - Sociedade de Investimento e Gestão SGPS shareholders lost 23% (even including dividends) . However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 2.5% per year over half a decade. 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. It's always interesting to track share price performance over the longer term. But to understand Semapa - Sociedade de Investimento e Gestão SGPS better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Semapa - Sociedade de Investimento e Gestão SGPS .
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 PT 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.
