Yahoo Finance If You Had Bought Vista Group International's (NZSE:VGL) Shares A Year Ago You Would Be Down 58%
Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of Vista Group International Limited (NZSE:VGL) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 58%. Notably, shareholders had a tough run over the longer term, too, with a drop of 48% in the last three years. Unfortunately the share price momentum is still quite negative, with prices down 11% in thirty days.
See our latest analysis for Vista Group International
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Vista Group International fell to a loss making position during the year. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. Of course, if the company can turn the situation around, investors will likely profit.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Vista Group International's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Vista Group International's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Vista Group International's TSR of was a loss of 56% for the year. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
Vista Group International shareholders are down 56% for the year, but the market itself is up 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Vista Group International better, we need to consider many other factors. For instance, we've identified 1 warning sign for Vista Group International that you should be aware of.
Vista Group International is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ exchanges.
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. 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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