Such Is Life: How Eifelhöhen-Klinik (FRA:EIF) Shareholders Saw Their Shares Drop 59%
The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Eifelhöhen-Klinik AG (FRA:EIF) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 59% decline in the share price in that time. And over the last year the share price fell 45%, so we doubt many shareholders are delighted. On top of that, the share price is down 10.0% in the last week. However, this move may have been influenced by the broader market, which fell 4.7% in that time.
Check out our latest analysis for Eifelhöhen-Klinik
Eifelhöhen-Klinik wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over three years, Eifelhöhen-Klinik grew revenue at 1.4% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 26% for the last three years. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Eifelhöhen-Klinik stock, you should check out this FREE detailed report on its balance sheet.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Eifelhöhen-Klinik's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Eifelhöhen-Klinik's TSR of was a loss of 56% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
Investors in Eifelhöhen-Klinik had a tough year, with a total loss of 45%, against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 14% per year over five years. We realise that Buffett 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. It's always interesting to track share price performance over the longer term. But to understand Eifelhöhen-Klinik better, we need to consider many other factors. Take risks, for example - Eifelhöhen-Klinik has 3 warning signs we think you should be aware of.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE 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.
