good to see Jaguar Mining Co., Ltd. (TSE:JAG) stock price rose 13% in one week. But only the myopic can ignore the astonishing three-year decline. The stock price sank like a leaking ship, dropping 73% in that time. So it's nice to see even the slightest improvement. But the more important question is whether the underlying business can justify an even higher price.
More encouragingly, the company has increased its market capitalization by CA$17m in the past 7 days. So let's see if we can identify the source of shareholder losses over three years.
Check out our latest analysis for Jaguar Mining.
In Buffett's words, “Ships will sail around the world, but a flat-Earth society will thrive.'' There will continue to be a wide discrepancy between prices and market values…'' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over the three years that the share price fell, Jaguar Mining's earnings per share (EPS) fell by 33% each year. This drop in EPS is not far off from the share price decline of 36% for the year. In other words, sentiment towards the stock doesn't seem to have changed much over time. Rather, the stock price has roughly tracked his EPS growth.
You can see below how EPS has changed over time (unveil the exact values by clicking on the image).
We like to see that insiders have made significant purchases in the last year. Even so, future profits will be far more important than whether current shareholders make money.this free This interactive report on Jaguar Mining's earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
What about total shareholder return (TSR)?
We've already covered Jaguar Mining's share price trend, but we should also talk about its 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 increases and spin-offs. Dividends are very beneficial to Jaguar Mining shareholders, and these cash dividends explain why the total shareholder loss of 71% over the last three years is not as bad as the share price return.
different perspective
While the broader market has gained about 5.9% in the last year, Jaguar Mining shareholders have lost 28%. Even blue-chip stocks can see their share prices drop from time to time, and we like to see improvement in a company's fundamental metrics before we get too interested. On the bright side, long-term shareholders have made money, with a return of 0.2% per year over 50 years. The recent selloff could be an opportunity, so it might be worth checking the fundamental data for signs of a long-term growth trend. It's always interesting to track stock performance over the long term. However, to understand Jaguar Mining better, you need to consider many other factors. Note that Jaguar Mining is still listed. 2 warning signs in investment analysis you should know…
Jaguar Mining isn't the only stock that insiders are buying.So take a look at this free A list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis, including below, to see if Jaguar Mining is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
