Such Is Life: How Yellow Pages (TSE:Y) Shareholders Saw Their Shares Drop 60%
It is doubtless a positive to see that the Yellow Pages Limited (TSE:Y) share price has gained some 33% in the last three months. But that can't change the reality that over the longer term (five years), the returns have been really quite dismal. In that time the share price has delivered a rude shock to holders, who find themselves down 60% after a long stretch. So we're hesitant to put much weight behind the short term increase. But it could be that the fall was overdone.
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Check out our latest analysis for Yellow Pages
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Yellow Pages became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.
Arguably, the revenue drop of 8.3% a year for half a decade suggests that the company can't grow in the long term. That could explain the weak share price.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
We know that Yellow Pages has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Yellow Pages stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While the broader market gained around 1.7% in the last year, Yellow Pages shareholders lost 7.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 17% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. If you would like to research Yellow Pages in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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 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. Thank you for reading.
