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Shareholders in Algoma Steel Group (NASDAQ:ASTL) have lost 14%, as stock drops 15% this past week

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Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Algoma Steel Group Inc. (NASDAQ:ASTL) share price is down 15% in the last year. That's well below the market decline of 9.4%. Because Algoma Steel Group hasn't been listed for many years, the market is still learning about how the business performs. It's down 22% in about a month. However, we note the price may have been impacted by the broader market, which is down 13% in the same time period.

After losing 15% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Algoma Steel Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

A Different Perspective

Algoma Steel Group shareholders are down 14% for the year (even including dividends), even worse than the market loss of 9.4%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 11% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. To that end, you should learn about the 3 warning signs we've spotted with Algoma Steel Group (including 1 which is potentially serious) .

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 US 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.