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The past year for Fox (NASDAQ:FOXA) investors has not been profitable

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·3-min read
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It's understandable if you feel frustrated when a stock you own sees a lower share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. The Fox Corporation (NASDAQ:FOXA) is down 11% over a year, but the total shareholder return is -9.9% once you include the dividend. That's better than the market which declined 12% over the last year. Looking at the longer term, the stock is down 9.4% over three years. It's down 21% in about a quarter. Of course, this share price action may well have been influenced by the 12% decline in the broader market, throughout the period.

Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

See our latest analysis for Fox

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).

Unhappily, Fox had to report a 40% decline in EPS over the last year. This fall in the EPS is significantly worse than the 11% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
earnings-per-share-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Fox's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We can sympathize with Fox about their 9.9% loss for the year ( including dividends), but the silver lining is that the broader market return was worse, at around -12%. The loss over the last year is steeper than the loss of 1.9% per year over three years. It should concern shareholders to see the pace of losses accelerate, and it makes us alert to the possibility that underlying business is not doing well. 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 be aware of the 3 warning signs we've spotted with Fox .

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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