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Imagine Owning TIL Logistics Group (NZSE:TLL) And Wondering If The 27% Share Price Slide Is Justified

Simply Wall St

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in TIL Logistics Group Limited (NZSE:TLL) have tasted that bitter downside in the last year, as the share price dropped 27%. That falls noticeably short of the market return of around 23%. We wouldn't rush to judgement on TIL Logistics Group because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 11% in the last 90 days.

See our latest analysis for TIL Logistics Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

TIL Logistics Group managed to increase earnings per share from a loss to a profit, over the last 12 months.

We're surprised that the share price is lower given that improvement. If the company can sustain the earnings growth, this might be an inflection point for the business, which would make right now a really interesting time to study it more closely.

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

NZSE:TLL Past and Future Earnings, November 23rd 2019

This free interactive report on TIL Logistics Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of TIL Logistics Group, it has a TSR of -24% for the last year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Given that the market gained 23% in the last year, TIL Logistics Group shareholders might be miffed that they lost 24% (even including dividends) . 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. The share price decline has continued throughout the most recent three months, down 11%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before forming an opinion on TIL Logistics Group you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.

We will like TIL Logistics Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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