The past three years for Sea Harvest Group (JSE:SHG) investors has not been profitable
A lot of investors consider successful investing to be doing better than the average market performance for a long period of time. However, it's almost guaranteed that there will be instances where the stocks you purchase end up not meeting the average market returns. Unfortunately, in the case of Sea Harvest Group Limited (JSE: SHG), long-term shareholders have had this unfortunate experience, as the share price has decreased by 30% in three years, whereas the market has seen a return of approximately 36%.
Now, let's examine the foundational aspects of the company and determine if the overall profitability for long-term shareholders aligns with the performance of the core business operations.
Take a look at our most recent examination of Sea Harvest Group
It's undeniable that markets can be efficient, but the value of shares doesn't always accurately represent a company's actual performance. By analyzing the changes in earnings per share (EPS) and share prices over a period of time, we can gauge how investors' perceptions of a company have evolved.
Over the course of three years, the value of Sea Harvest Group's shares experienced a decrease, while their earnings per share saw a decline of 9.0% annually. This reduction in EPS aligns closely with the rate at which the share price fell, which amounted to 11% each year. Thus, it appears that the overall perception of the stock has remained relatively consistent throughout this period, with the share price largely mirroring the changes in EPS.
The image below provides a visual representation of the evolution of EPS over the years. To view the precise figures, simply click on the chart.
You should definitely check out our complimentary analysis of Sea Harvest Group's financial performance, including its earnings, revenue, and cash flow.
In addition to assessing the increase in share price, it is important for investors to also consider the overall return for shareholders (TSR). While the share price return only shows the fluctuation in share price, the TSR takes into account the value of dividends (if reinvested) and the advantage of any discounted capital raising or spin-off. Therefore, for companies that distribute generous dividends, the TSR is often significantly higher than the share price return. As seen in the case of Sea Harvest Group, its TSR over the past three years is -22%. This surpasses the previously mentioned share price return. The dividends provided by the company have contributed to a boost in the overall return for shareholders.
Despite the overall market seeing a 3.2% increase in the past year, Sea Harvest Group shareholders experienced a decline of 18% in their investment value, even when accounting for dividends. It's important to note that even the best stocks can sometimes perform worse than the market within a twelve-month period. Unfortunately, this decline in performance adds to a series of negative results, with shareholders facing an average loss of 2% annually over the past five years. Typically, a long-term weakness in share prices can indicate trouble, although contrarian investors may choose to investigate the stock in hopes of a reversal. While considering the potential impact of market conditions on share prices is valuable, there are other factors that hold even greater importance. For instance, we have identified three warning signs for Sea Harvest Group that investors should be mindful of, with one of them being significant.
However, it is important to consider that Sea Harvest Group may not be the most advantageous stock to invest in. Therefore, we suggest you take a glance at this complimentary compilation of intriguing companies that have experienced growth in the past (and are expected to continue growing).
Please be aware that the market returns mentioned in this article represent the average returns of stocks listed on South African exchanges, based on their market weight.
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This blog post from Simply Wall St is written with a broad approach. We offer our thoughts based on past information and predictions from analysts, following a fair approach. Our blog posts are not meant to be financial guidance and should not be seen as a suggestion to buy or sell any stocks. Additionally, we do not consider your individual goals or financial circumstances. Our goal is to provide in-depth analysis that focuses on long-term perspectives and is guided by fundamental data. However, it's important to note that our analysis may not include the most recent company news or subjective information. Please be aware that Simply Wall St does not have any investments in the stocks mentioned.
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