It is doubtless a positive to see that the Silverlake Axis Ltd (SGX:5CP) share price has gained some 31% in the last three months. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 25% in that half decade.

View our latest analysis for Silverlake Axis

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 five years over which the share price declined, Silverlake Axis’s earnings per share (EPS) dropped by 2.7% each year. This reduction in EPS is less than the 5.5% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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. Dive deeper into the earnings by checking this interactive graph of Silverlake Axis’s earnings, revenue and cash flow.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Silverlake Axis, it has a TSR of -1.8% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We’re pleased to report that Silverlake Axis shareholders have received a total shareholder return of 3.0% over one year. Of course, that includes the dividend. There’s no doubt those recent returns are much better than the TSR loss of 0.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Silverlake Axis by clicking this link.