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Imagine Owning Standex International (NYSE:SXI) While The Price Tanked 51%

Simply Wall St

Standex International Corporation (NYSE:SXI) shareholders should be happy to see the share price up 14% in the last month. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 51% in the last three years, falling well short of the market return.

See our latest analysis for Standex International

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 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.

Standex International saw its EPS decline at a compound rate of 1.5% per year, over the last three years. The share price decline of 21% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past.

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

NYSE:SXI Past and Future Earnings April 21st 2020
NYSE:SXI Past and Future Earnings April 21st 2020

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

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Standex International'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. Standex International's TSR of was a loss of 50% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

While the broader market lost about 0.8% in the twelve months, Standex International shareholders did even worse, losing 37% (even including dividends) . Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Standex International better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Standex International you should be aware of.

But note: Standex International may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.