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Introducing TCF Financial (NASDAQ:TCF), The Stock That Dropped 42% In The Last Year

Simply Wall St
·3 mins read

TCF Financial Corporation (NASDAQ:TCF) shareholders should be happy to see the share price up 15% in the last month. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 42% in one year, under-performing the market.

See our latest analysis for TCF Financial

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. 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, TCF Financial had to report a 26% decline in EPS over the last year. The share price decline of 42% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. The P/E ratio of 10.02 also points to the negative market sentiment.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

NasdaqGS:TCF Past and Future Earnings April 15th 2020
NasdaqGS:TCF Past and Future Earnings April 15th 2020

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on TCF Financial's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered TCF Financial's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for TCF Financial shareholders, and that cash payout explains why its total shareholder loss of 40%, over the last year, isn't as bad as the share price return.

A Different Perspective

We regret to report that TCF Financial shareholders are down 40% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 3.5%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.0% per year over five years. 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 TCF Financial better, we need to consider many other factors. Even so, be aware that TCF Financial is showing 4 warning signs in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.