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Volatility 101: Should Emerald Expositions Events (NYSE:EEX) Shares Have Dropped 20%?

Simply Wall St

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Emerald Expositions Events, Inc. (NYSE:EEX) share price slid 20% over twelve months. That falls noticeably short of the market return of around 14%. Emerald Expositions Events hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The silver lining is that the stock is up 4.6% in about a week.

See our latest analysis for Emerald Expositions Events

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.

Emerald Expositions Events fell to a loss making position during the year. Some investors no doubt dumped the stock as a result. Of course, if the company can turn the situation around, investors will likely profit.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

NYSE:EEX Past and Future Earnings, November 5th 2019

This free interactive report on Emerald Expositions Events's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Emerald Expositions Events the TSR over the last year was -18%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While Emerald Expositions Events shareholders are down 18% for the year (even including dividends) , the market itself is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 7.1% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. You could get a better understanding of Emerald Expositions Events's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

But note: Emerald Expositions Events 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.

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.