Hochschild Mining (LON:HOC) investors are sitting on a loss of 60% if they invested three years ago
While not a mind-blowing move, it is good to see that the Hochschild Mining plc (LON:HOC) share price has gained 19% in the last three months. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 62% in that time. So the improvement may be a real relief to some. While many would remain nervous, there could be further gains if the business can put its best foot forward.
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.
Check out our latest analysis for Hochschild Mining
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Hochschild Mining saw its EPS decline at a compound rate of 53% per year, over the last three years. This fall in the EPS is worse than the 28% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines. With a P/E ratio of 189.02, it's fair to say the market sees a brighter future for the business.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on Hochschild Mining's earnings, revenue and cash flow.
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Hochschild Mining's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Hochschild Mining's TSR of was a loss of 60% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
It's good to see that Hochschild Mining has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That certainly beats the loss of about 8% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Hochschild Mining better, we need to consider many other factors. Even so, be aware that Hochschild Mining is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
Of course Hochschild Mining 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 British exchanges.
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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.
