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Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the FDM Group (Holdings) plc (LON:FDM) share price is down 46% in the last year. That falls noticeably short of the market decline of around 9.4%. However, the longer term returns haven't been so bad, with the stock down 5.2% in the last three years. The falls have accelerated recently, with the share price down 22% in the last three months.
With the stock having lost 6.2% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Check out our latest analysis for FDM Group (Holdings)
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Even though the FDM Group (Holdings) share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.
The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
The fact that the dividend has fallen is probably weighing on the share price, as it implies some form of business stress.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on FDM Group (Holdings)
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for FDM Group (Holdings) the TSR over the last 1 year was -44%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While the broader market lost about 9.4% in the twelve months, FDM Group (Holdings) shareholders did even worse, losing 44% (even including dividends). 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.8% 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. It's always interesting to track share price performance over the longer term. But to understand FDM Group (Holdings) better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with FDM Group (Holdings) .