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Investors in Byron Energy (ASX:BYE) have unfortunately lost 64% over the last three years

·2 min read

If you love investing in stocks you're bound to buy some losers. But the last three years have been particularly tough on longer term Byron Energy Limited (ASX:BYE) shareholders. Unfortunately, they have held through a 64% decline in the share price in that time. The falls have accelerated recently, with the share price down 25% in the last three months.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Byron Energy

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Byron Energy saw its EPS decline at a compound rate of 17% per year, over the last three years. This reduction in EPS is slower than the 29% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 8.16.

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

earnings-per-share-growth
earnings-per-share-growth

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

A Different Perspective

It's good to see that Byron Energy has rewarded shareholders with a total shareholder return of 3.8% in the last twelve months. Having said that, the five-year TSR of 10% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Byron Energy you should know about.

But note: Byron Energy 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 AU exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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