Passive investing in index funds is a good way to ensure that your returns closely match the overall market. Active investors aim to buy stocks that significantly outperform the market, but they take the risk of underperforming in the process. The downside risk was realized by Leontec AG (VTX:LEON) shareholders have seen the share price drop 47% in the last year. This is well below the market return of 10%. We recognize that his past three years have not been easy for shareholders either. The stock price fell 42% during this time. Shareholders' management has become even more difficult recently, and the stock price has fallen 23% in the past 90 days.
So let's take a look at whether the company's long-term performance is in line with the progress of its underlying business.
Check out our latest analysis for Leonteq.
in his essay Graham & Doddsville SuperInvestors Warren Buffett has said that stock prices do not always rationally reflect the value of a company. One way he looks at how market sentiment has changed over time is to look at the interaction between a company's stock price and his earnings per share (EPS).
Unfortunately, Leonteq had to report an 87% decline in EPS over the last year. This drop in EPS is significantly worse than the 47% drop in the share price. So despite the low earnings per share, some investors may be relieved that things haven't gotten any worse.
The image below shows how EPS has changed over time (unveil the exact values by clicking on the image).
this free This interactive report on Leonteq's earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
What will happen to the dividend?
It's important to consider not only the share price return, but also the total shareholder return for a particular stock. 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 increases and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that Leonteq's TSR over the past year was -43%, which is better than the share price return mentioned above. This is primarily due to dividend payments.
different perspective
While the broader market is up about 10% in the last year, Leonteq shareholders are down 43% (even including dividends). Even blue-chip stocks can see their share prices drop from time to time, and we like to see improvement in a company's fundamental metrics before we get too interested. Unfortunately, last year's performance ended on a down note, with shareholders facing a total annual loss of 4% over five years. Generally speaking, long-term stock price weakness can be a bad sign, but contrarian investors may want to research the stock in hopes of a turnaround. It's always interesting to track stock performance over the long term. However, to understand Leonteq better, you need to consider many other factors.Case in point: we discovered 4 warning signs for Leonteq As you should know, one of them makes us a little uncomfortable.
We would further like Leontec if we see some significant insider buying.While you wait, check this out free A list of growing companies with significant recent insider purchasing.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Swiss exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
