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Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the UOL Group Limited (SGX:U14) share price slid 21% over twelve months. That contrasts poorly with the market return of -3.7%. Longer term investors have fared much better, since the share price is up 12% in three years. Unhappily, the share price slid 2.4% in the last week.
See our latest analysis for UOL Group
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.
Unfortunately UOL Group reported an EPS drop of 53% for the last year. This fall in the EPS is significantly worse than the 21% the share price fall. So the market may not be too worried about the EPS figure, at the moment — or it may have expected earnings to drop faster.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on UOL Group’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
Investors should note that there’s a difference between UOL Group’s total shareholder return (TSR) and its share price change, which we’ve covered above. 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. Dividends have been really beneficial for UOL Group shareholders, and that cash payout explains why its total shareholder loss of 19%, over the last year, isn’t as bad as the share price return.
A Different Perspective
We regret to report that UOL Group shareholders are down 19% for the year (even including dividends). Unfortunately, that’s worse than the broader market decline of 3.7%. 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. Longer term investors wouldn’t be so upset, since they would have made 4.1%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. If you would like to research UOL Group in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.