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The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Apiam Animal Health Limited (ASX:AHX) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 71% decline in the share price in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 36% lower in that time. On top of that, the share price is down 9.4% in the last week.
See our latest analysis for Apiam Animal Health
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 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.
During the unfortunate three years of share price decline, Apiam Animal Health actually saw its earnings per share (EPS) improve by 230% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
With revenue flat over three years, it seems unlikely that the share price is reflecting the top line. We're not entirely sure why the share price is dropped, but it does seem likely investors have become less optimistic about the business.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Apiam Animal Health in this interactive graph of future profit estimates.
What about the Total Shareholder Return (TSR)?
We've already covered Apiam Animal Health's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Apiam Animal Health's TSR, which was a 69% drop over the last 3 years, was not as bad as the share price return.