This week we saw the DNO ASA (OB:DNO) share price climb by 18%. But that hardly compensates for the shocking decline over the last twelve months. To wit, the stock has dropped 76% over the last year. So the rise may not be much consolation. The important thing is whether the company can turn it around, longer term.

View our latest analysis for DNO

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

Unfortunately DNO reported an EPS drop of 79% for the last year. Remarkably, he share price decline of 76% per year is particularly close to the EPS drop. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Instead, the change in the share price seems to reduction in earnings per share, alone.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on DNO's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered DNO's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. DNO's TSR of was a loss of 75% for the year. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

We regret to report that DNO shareholders are down 75% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 19%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 18% 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 DNO better, we need to consider many other factors. For instance, we've identified 5 warning signs for DNO (1 is significant) that you should be aware of.