Introducing Ituran Location and Control (NASDAQ:ITRN), The Stock That Dropped 24% In The Last Year
It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Ituran Location and Control Ltd. (NASDAQ:ITRN) share price is down 24% in the last year. That's disappointing when you consider the market returned 24%. However, the longer term returns haven't been so bad, with the stock down 10% in the last three years. It's down 4.5% in the last seven days.
See our latest analysis for Ituran Location and Control
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unhappily, Ituran Location and Control had to report a 44% decline in EPS over the last year. This fall in the EPS is significantly worse than the 24% the share price fall. It may have been that the weak EPS was not as bad as some had feared.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Dive deeper into Ituran Location and Control's key metrics by checking this interactive graph of Ituran Location and Control's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Ituran Location and Control, it has a TSR of -21% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Ituran Location and Control shareholders are down 21% for the year (even including dividends) , but the market itself is up 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 6.7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Ituran Location and Control better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Ituran Location and Control you should know about.
But note: Ituran Location and Control 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.
