Spritzer Bhd (KLSE:SPRITZER) investors are sitting on a 4.1% loss if they had invested five years ago

In order to justify the effort of picking individual stocks, it is worth striving to beat the returns of an index fund. But every investor is virtually certain to have both outperforming and underperforming stocks. So we wouldn’t blame in the long run Spritzer Bhd (KLSE: SPRITZER) shareholders for doubting their decision to hold, the stock having fallen 14% in half a decade.

Given that shareholders are down longer term, let’s take a look at the underlying fundamentals over this period and see if they have been consistent with returns.

Check out our latest analysis for Spritzer Bhd

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

While the share price has declined over five years, Spritzer Bhd has actually managed to increase EPS of 1.0% on average per year. Given the stock price reaction, one might suspect that EPS is not a good indicator of the company’s performance over the period (perhaps due to a loss or a one-time gain). Or maybe the market was previously very bullish, so the stock disappointed, despite improving EPS.

Given that EPS has increased, but the share price has fallen, it’s fair to say that market sentiment around the stock has turned more negative. Generally speaking, however, if the company can continue to increase EPS, the share price will eventually follow.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

earnings per share growth

It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. But while it’s still worth checking out CEO compensation, the really important question is whether the company can increase its profits in the future. It might be interesting to take a look at our free Spritzer Bhd earnings, revenue and cash flow report.

What about dividends?

It is important to consider the total shareholder return, as well as the stock price return, for a given stock. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. It can be said that the TSR gives a more complete picture of the return generated by a stock. We note that for Spritzer Bhd the TSR over the last 5 years was -4.1%, which is better than the stock price return mentioned above. The dividends paid by the company thus inflated the total return to shareholders.

A different perspective

It’s nice to see that Spritzer Bhd shareholders have received a total shareholder return of 3.4% over the past year. And that includes the dividend. There is no doubt that these recent returns are much better than TSR’s loss of 0.8% per year over five years. This makes us a little suspicious, but the company may have changed course. It is always interesting to follow the evolution of the share price over the long term. But to better understand Spritzer Bhd, we need to consider many other factors. Take risks, for example – Spritzer Bhd has 4 warning signs (and 1 which is potentially serious) we think you should know.

We’d like Spritzer Bhd better if we see big insider buying. In the meantime, watch this free list of growing companies with significant and recent insider buying.

Please note that the market returns quoted in this article reflect the market-weighted average returns of the stocks currently trading on the MY exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Robert D. Coleman