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Taking the occasional loss comes part and parcel with investing on the stock market. And unfortunately for Compuage Infocom Limited (NSE:COMPUAGE) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 60% in that time. We note that it has not been easy for shareholders over three years, either; the share price is down 58% in that time. Furthermore, it's down 27% in about a quarter. That's not much fun for holders.
See our latest analysis for Compuage Infocom
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 twelve months during which the Compuage Infocom share price fell, it actually saw its earnings per share (EPS) improve by 1.0%. It could be that the share price was previously over-hyped. It seems quite likely that the market was expecting higher growth from the stock. But other metrics might shed some light on why the share price is down.
Compuage Infocom managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Compuage Infocom's balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We've already covered Compuage Infocom's share price action, but we should also mention its total shareholder return (TSR). 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. Dividends have been really beneficial for Compuage Infocom shareholders, and that cash payout explains why its total shareholder loss of 60%, over the last year, isn't as bad as the share price return.
A Different Perspective
We regret to report that Compuage Infocom shareholders are down 60% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 1.3%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3.7% per year over five years. We realise that Buffett 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 businesses. Keeping this in mind, a solid next step might be to take a look at Compuage Infocom's dividend track record. This free interactive graph is a great place to start.