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As every investor would know, not every swing hits the sweet spot. But really bad investments should be rare. So consider, for a moment, the misfortune of boohoo group plc (LON:BOO) investors who have held the stock for three years as it declined a whopping 88%. That'd be enough to cause even the strongest minds some disquiet. The more recent news is of little comfort, with the share price down 72% in a year. More recently, the share price has dropped a further 13% in a month. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
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.
View our latest analysis for boohoo group
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
boohoo group saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
A Different Perspective
We regret to report that boohoo group shareholders are down 72% for the year. Unfortunately, that's worse than the broader market decline of 5.6%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand boohoo group better, we need to consider many other factors. Even so, be aware that boohoo group is showing 1 warning sign in our investment analysis , you should know about...
Of course boohoo group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.