Did Changing Sentiment Drive Harboes Bryggeri's (CPH:HARB B) Share Price Down A Worrying 60%?
The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Harboes Bryggeri A/S (CPH:HARB B) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 60% in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 35% lower in that time. The falls have accelerated recently, with the share price down 13% in the last three months. But this could be related to the weak market, which is down 12% in the same period.
View our latest analysis for Harboes Bryggeri
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.
Harboes Bryggeri saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on Harboes Bryggeri's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Harboes Bryggeri's total shareholder return (TSR) and its share price return. 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. Harboes Bryggeri's TSR of was a loss of 59% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
Harboes Bryggeri shareholders are down 35% for the year, but the market itself is up 2.4%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 12% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Harboes Bryggeri (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
We will like Harboes Bryggeri better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DK 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.
