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Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) shareholders should be happy to see the share price up 13% in the last month. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 48% in the last three years, falling well short of the market return.
See our latest analysis for Loma Negra Compañía Industrial Argentina Sociedad Anónima
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Although the share price is down over three years, Loma Negra Compañía Industrial Argentina Sociedad Anónima actually managed to grow EPS by 25% per year in that time. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.
Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
With revenue flat over three years, it seems unlikely that the share price is reflecting the top line. We're not entirely sure why the share price is dropped, but it does seem likely investors have become less optimistic about the business.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that Loma Negra Compañía Industrial Argentina Sociedad Anónima has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Loma Negra Compañía Industrial Argentina Sociedad Anónima, it has a TSR of -45% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
Loma Negra Compañía Industrial Argentina Sociedad Anónima shareholders have gained 48% over twelve months (even including dividends). This isn't far from the market return of 48%. Given the three-year TSR of 13% per year, shareholders probably aren't too concerned by the recent gain! It could well be that the business is getting back on track. I find it 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. To that end, you should be aware of the 1 warning sign we've spotted with Loma Negra Compañía Industrial Argentina Sociedad Anónima .