Chorus Aviation Inc. (TSE:CHR) shareholders should be happy to see the share price up 10% in the last month. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 32% in the last three years, significantly under-performing the market.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the three years that the share price fell, Chorus Aviation's earnings per share (EPS) dropped by 52% each year. This fall in the EPS is worse than the 12% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free interactive report on Chorus Aviation's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We've already covered Chorus Aviation'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. Chorus Aviation's TSR of was a loss of 22% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
Chorus Aviation provided a TSR of 26% over the last twelve months. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 1.0% per year over five year. This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Chorus Aviation better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Chorus Aviation (of which 1 is potentially serious!) 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 CA exchanges.
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. 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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