The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the ABG Sundal Collier Holding ASA (OB:ASC) share price is down 45% in the last year. That contrasts poorly with the market return of -11%. Notably, shareholders had a tough run over the longer term, too, with a drop of 37% in the last three years. On top of that, the share price has dropped a further 11% in a month.
Check out our latest analysis for ABG Sundal Collier Holding
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, ABG Sundal Collier Holding had to report a 35% decline in EPS over the last year. The share price decline of 45% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business. The P/E ratio of 10.27 also points to the negative market sentiment.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into ABG Sundal Collier Holding's key metrics by checking this interactive graph of ABG Sundal Collier Holding's earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, ABG Sundal Collier Holding's TSR for the last year was -40%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While the broader market lost about 11% in the twelve months, ABG Sundal Collier Holding shareholders did even worse, losing 40% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 0.1%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before forming an opinion on ABG Sundal Collier Holding you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.