These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. By comparison, an individual stock is unlikely to match market returns - and could well fall short. That's what happened in the case of Barry Callebaut AG (VTX:BARN): its share price dropped 12% while the market declined 9.2%. However, the longer term returns haven't been so bad, with the stock down 2.9% in the last three years.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for Barry Callebaut

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Unhappily, Barry Callebaut had to report a 6.0% decline in EPS over the last year. The share price decline of 12% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Barry Callebaut's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Barry Callebaut shareholders are down 11% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 9.2%. 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. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before forming an opinion on Barry Callebaut you might want to consider these 3 valuation metrics.

Of course Barry Callebaut may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CH exchanges.