While not a mind-blowing move, it is good to see that the Ranhill Utilities Berhad (KLSE:RANHILL) share price has gained 17% in the last three months. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 55% in the last three years. So the improvement may be a real relief to some. After all, could be that the fall was overdone.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Ranhill Utilities Berhad
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. 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.
Ranhill Utilities Berhad saw its EPS decline at a compound rate of 21% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 23% per year. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. In this case, it seems that the EPS is guiding the share price.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Ranhill Utilities Berhad has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
A Different Perspective
While the broader market lost about 2.0% in the twelve months, Ranhill Utilities Berhad shareholders did even worse, losing 18%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 2% over the last half decade. 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 Ranhill Utilities Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Ranhill Utilities Berhad you should know about.