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Those Who Purchased United States Cellular (NYSE:USM) Shares A Year Ago Have A 36% Loss To Show For It

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United States Cellular Corporation (NYSE:USM) shareholders should be happy to see the share price up 12% in the last week. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 36% in one year, under-performing the market.

View our latest analysis for United States Cellular

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Unhappily, United States Cellular had to report a 15% decline in EPS over the last year. The share price decline of 36% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

NYSE:USM Past and Future Earnings April 9th 2020
NYSE:USM Past and Future Earnings April 9th 2020

We know that United States Cellular has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling United States Cellular stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that United States Cellular shareholders are down 36% for the year. Unfortunately, that's worse than the broader market decline of 6.0%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3.9% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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 be aware of the 1 warning sign we've spotted with United States Cellular .

But note: United States Cellular 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 US exchanges.

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.

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. Thank you for reading.