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Earnings are growing at Alpine Income Property Trust (NYSE:PINE) but shareholders still don't like its prospects

It's normal to be annoyed when stock you own has a declining share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. So while the Alpine Income Property Trust, Inc. (NYSE:PINE) share price is down 12% in the last year, the total return to shareholders (which includes dividends) was -6.6%. That's better than the market which declined 21% over the last year. Alpine Income Property Trust hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The last month has also been disappointing, with the stock slipping a further 13%. But this could be related to poor market conditions -- stocks are down 11% in the same time.

If the past week is anything to go by, investor sentiment for Alpine Income Property Trust isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Alpine Income Property Trust

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.

The last year saw Alpine Income Property Trust's EPS really take off. While the business is unlikely to sustain such a high growth rate for long, it's great to see. As you can imagine, the share price action therefore perturbs us. Some different data might shed some more light on the situation.

Alpine Income Property Trust's dividend seems healthy to us, so we doubt that the yield is a concern for the market. The revenue trend doesn't seem to explain why the share price is down. Unless, of course, the market was expecting a revenue uptick.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that Alpine Income Property Trust has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Alpine Income Property Trust will earn in the future (free profit 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. We note that for Alpine Income Property Trust the TSR over the last 1 year was -6.6%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's not great that Alpine Income Property Trust shares failed to make money for shareholders in the last year, but the silver lining is that the loss of 6.6%, including dividends, wasn't as bad as the broader market loss of about 21%. Things weren't so bad until the last three months, when the stock dropped 9.6%. The recent drop implies that investors are increasingly averse to the stock -- quite possibly due to a deterioration of the business. However, this could create an opportunity if the fundamentals remain strong. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Alpine Income Property Trust (at least 2 which are significant) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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