Investors in Hochschild Mining (LON:HOC) from three years ago are still down 56%, even after 22% gain this past week
Hochschild Mining plc (LON:HOC) shareholders should be happy to see the share price up 22% in the last week. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 58%. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.
While the stock has risen 22% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
See our latest analysis for Hochschild Mining
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Hochschild Mining saw its share price decline over the three years in which its EPS also dropped, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
What About The Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Hochschild Mining's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Hochschild Mining's TSR, which was a 56% drop over the last 3 years, was not as bad as the share price return.
A Different Perspective
It's nice to see that Hochschild Mining shareholders have received a total shareholder return of 33% over the last year. Notably the five-year annualised TSR loss of 7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. You could get a better understanding of Hochschild Mining's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
But note: Hochschild Mining 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 British exchanges.
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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.
