We're definitely into long term investing, but some companies are simply bad investments over any time frame. We don't wish catastrophic capital loss on anyone. Spare a thought for those who held Clover Corporation Limited (ASX:CLV) for five whole years - as the share price tanked 75%. We also note that the stock has performed poorly over the last year, with the share price down 57%. Shareholders have had an even rougher run lately, with the share price down 38% in the last 90 days.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

View our latest analysis for Clover

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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, Clover's earnings per share (EPS) dropped by 27% each year. Notably, the share price has fallen at 24% per year, fairly close to the change in the EPS. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price change has reflected changes in earnings per share.

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

Dive deeper into Clover's key metrics by checking this interactive graph of Clover's earnings, revenue and cash flow.

A Different Perspective

Clover shareholders are down 57% for the year, but the market itself is up 8.2%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 12% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Case in point: We've spotted 2 warning signs for Clover you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.