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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by Thyrocare Technologies Limited (NSE:THYROCARE) shareholders over the last year, as the share price declined 18%. That contrasts poorly with the market return of 2.4%. Taking the longer term view, the stock fell 17% over the last three years. Furthermore, it's down 12% in about a quarter. That's not much fun for holders.
Check out our latest analysis for Thyrocare Technologies
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unhappily, Thyrocare Technologies had to report a 8.1% decline in EPS over the last year. This reduction in EPS is not as bad as the 18% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Thyrocare Technologies's earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Thyrocare Technologies's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Thyrocare Technologies's TSR, which was a 18% drop over the last year, was not as bad as the share price return.
A Different Perspective
Thyrocare Technologies shareholders are down 18% for the year (even including dividends), but the broader market is up 2.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 4.8% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.