Reflecting on Phoenix Mecano’s (VTX:PM) Share Price Returns Over The Last Three Years

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Reflecting on Phoenix Mecano’s (VTX:PM) Share Price Returns Over The Last Three Years

As an investor, it pays to ensure that your overall portfolio outperforms the market average. The risk with stock picking, however, is that you are likely to buy poorly performing companies. Unfortunately, this was the case with longer-term shareholders of Phoenix Mecano AG (VTX: PM), as the share price has fallen by 34% over the past three years and is thus well below the market return of around 39%. See our latest analysis for Phoenix Mecano. To quote Buffett, “Ships will sail around the world, but the Flat Earth Society will thrive. There will continue to be large discrepancies between price and value in the market … ‘An imperfect but simple way to look at how a company’s perception of the market has changed is to use the change in earnings per share (EPS) to compare the stock price movement. For the three years that its share price fell, Phoenix Mecano’s earnings per share (EPS) fell 25% each year. By comparison, the average annual drop in stock price of 13% isn’t as bad as the drop in EPS. So the market may not be too concerned about the EPS figure right now – or it may have priced in some of the decline beforehand. With a P / E of 45.18, the market sees a better future for bright’s business. In the image below you can see how the EPS has changed over time (click on the graph to see the exact values). SWX: PM Earnings Per Share Growth May 31, 2021 This free interactive report on Phoenix Mecano’s earnings, sales, and cash flow is a great place to start if you want to explore the stock further. What about dividends? In addition to measuring stock price return, investors should also consider total shareholder return (TSR). While the stock price return only reflects the change in the stock price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of discounted capital raising or spin-off. The TSR arguably offers a more complete picture of the return generated by a stock. In the case of Phoenix Mecano, it has had a TSR of -28% over the past 3 years. That exceeds the already mentioned share price return. The dividends paid by the company have increased the total shareholder return. Another perspective It is good to see that Phoenix Mecano has rewarded shareholders with a total shareholder return of 27% over the past twelve months. Of course, this also includes the dividend. With the one-year TSR outperforming the five-year TSR (the latter is 1.5% per annum), the stock’s performance seems to have improved recently. At best, this can indicate some real business momentum, which means now might be a good time to go deeper. I find it very interesting to look at the share price as a proxy for business development over the long term. But to really gain insight we need to consider other information as well. Note, however, that Phoenix Mecano has 4 red flags in our investment analysis, 1 of which should not be ignored … If you enjoy buying stocks alongside management then you might love this free list of companies. (Note: Insiders bought them). Please note that the market returns given in this article reflect the market weighted average returns on stocks currently traded on CH exchanges. SponsoredIf you want to trade with Phoenix Mecano, open an account with the lowest cost * platform that professionals trust, Interactive Estate agents. Your clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide through a single integrated account. This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which is sensitive to the price. Simply Wall St has no position in the stocks mentioned. * Interactive Brokers rated as Lowest Cost Broker by StockBrokers.com Annual Online Review 2020 Concerned about the content? Contact us directly. Alternatively, send an email to the editorial team (at) simplywallst.com.

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