Appreciate Group plc (LON:APP) shareholders should be happy to see the share price up 12% in the last month. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 56%. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.
View our latest analysis for Appreciate Group
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the three years that the share price fell, Appreciate Group's earnings per share (EPS) dropped by 18% each year. The share price decline of 24% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 11.63.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
This free interactive report on Appreciate 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)?
We'd be remiss not to mention the difference between Appreciate Group's total shareholder return (TSR) and its share price return. 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. Dividends have been really beneficial for Appreciate Group shareholders, and that cash payout explains why its total shareholder loss of 51%, over the last 3 years, isn't as bad as the share price return.
A Different Perspective
We regret to report that Appreciate Group shareholders are down 43% for the year. Unfortunately, that's worse than the broader market decline of 6.1%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6.8% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Appreciate Group you should know about.
But note: Appreciate Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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August 17, 2020 at 03:25PM
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What Type Of Returns Would Appreciate Group's(LON:APP) Shareholders Have Earned If They Purchased Their SharesThree Years Ago? - Yahoo Finance
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