Investors in Ero Copper (TSE:ERO) have seen respectable returns of 82% over the past five years
The last three months have been tough on Ero Copper Corp. (TSE:ERO) shareholders, who have seen the share price decline a rather worrying 37%. Looking further back, the stock has generated good profits over five years. Its return of 82% has certainly bested the market return!
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Ero Copper
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.
During five years of share price growth, Ero Copper achieved compound earnings per share (EPS) growth of 33% per year. The EPS growth is more impressive than the yearly share price gain of 13% over the same period. So one could conclude that the broader market has become more cautious towards the stock.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Ero Copper has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Ero Copper's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Ero Copper shareholders have received a total shareholder return of 35% over one year. That gain is better than the annual TSR over five years, which is 13%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Ero Copper (of which 1 makes us a bit uncomfortable!) you should know about.
But note: Ero Copper 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 Canadian 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.
