The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Tantech Holdings Ltd (NASDAQ:TANH) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 65% drop in the share price over that period. There was little comfort for shareholders in the last week as the price declined a further 2.7%.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
Tantech Holdings saw its EPS decline at a compound rate of 40% per year, over the last three years. In comparison the 29% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
The last twelve months weren't great for Tantech Holdings shares, which cost holders 7.2%, while the market was up about 7.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, the longer term story isn't pretty, with investment losses running at 29% per year over three years. We'd need clear signs of growth in the underlying business before we could muster much enthusiasm for this one. Before deciding if you like the current share price, check how Tantech Holdings scores on these 3 valuation metrics.
Of course Tantech Holdings 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 US exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.