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This week we saw the Ferrexpo plc ( LON:FXPO ) share price climb by 14%. But that isn't much consolation to those who have endured the declines of the last year. Specifically, the stock price slipped by 59% in that time. Some might say the recent bounce is to be expected after such a bad drop.
You could argue that the recent uptick of 14% could be a sign that perhaps the sell-off was too severe, so let's take a lot at historical fundamentals.
View our latest analysis for Ferrexpo
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the unfortunate twelve months during which the Ferrexpo share price fell, it actually saw its earnings per share (EPS) improve by 37%. It's quite possible that growth expectations may have been unreasonable in the past.
Considering recent geopolitical events, its not surprising to see the company's share price decline, despite the improved EPS. However, for investors who see opportunity in the future, it is imporant to look at some other metrics.
The company has recently cut back on its dividends, which is understable given the environment the business operates in and might help explain why the Ferrexpo share price has been weak.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Ferrexpo will earn in the future (free profit forecasts) .
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Ferrexpo's TSR for the last 1 year was -55%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
Ferrexpo shareholders are down 55% for the year (even including dividends), but the market itself is up 1.2%. However, keep in mind that the business has mines operating in the Ukraine. The consequences of conflict have undoubtedly affected the company's share price despite strong underlying EPS growth. On the bright side, long term shareholders have made money, with a gain of 11% per year over half a decade. Should geopolitical tensions ease, the recent sell-off could provide inveestors with an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Ferrexpo (of which 1 is concerning!) you should know about.