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Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. At this point some shareholders may be questioning their investment in Suntec Real Estate Investment Trust (SGX:T82U), since the last five years saw the share price fall 33%. Unfortunately the share price momentum is still quite negative, with prices down 8.2% in thirty days.
After losing 4.7% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
View our latest analysis for Suntec Real Estate Investment Trust
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 five years over which the share price declined, Suntec Real Estate Investment Trust's earnings per share (EPS) dropped by 9.9% each year. The share price decline of 8% per year isn't as bad as the EPS decline. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on Suntec Real Estate Investment Trust's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given 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 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 Suntec Real Estate Investment Trust the TSR over the last 5 years was -13%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Suntec Real Estate Investment Trust shareholders gained a total return of 17% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 2% per year, over five years. It could well be that the business is stabilizing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Suntec Real Estate Investment Trust (including 1 which is a bit concerning) .