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If You Had Bought VGI Partners' (ASX:VGI) Shares A Year Ago You Would Be Down 41%

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Simply Wall St
·3 min read
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It's nice to see the VGI Partners Limited (ASX:VGI) share price up 16% in a week. But in truth the last year hasn't been good for the share price. In fact, the price has declined 41% in a year, falling short of the returns you could get by investing in an index fund.

Check out our latest analysis for VGI Partners

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Unhappily, VGI Partners had to report a 66% decline in EPS over the last year. This fall in the EPS is significantly worse than the 41% the share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster. With a P/E ratio of 51.81, it's fair to say the market sees an EPS rebound on the cards.

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

earnings-per-share-growth
earnings-per-share-growth

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

A Different Perspective

While VGI Partners shareholders are down 40% for the year (even including dividends), the market itself is up 2.7%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 1.2%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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. For instance, we've identified 1 warning sign for VGI Partners that you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

This article by Simply Wall St is general in nature. 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.

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