The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Malmbergs Elektriska AB (publ) (STO:MEAB B) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 61% drop in the share price over that period. And the ride hasn't got any smoother in recent times over the last year, with the price 40% lower in that time. Shareholders have had an even rougher run lately, with the share price down 14% in the last 90 days.

See our latest analysis for Malmbergs Elektriska

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Malmbergs Elektriska saw its EPS decline at a compound rate of 19% per year, over the last three years. This reduction in EPS is slower than the 27% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

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

It might be well worthwhile taking a look at our free report on Malmbergs Elektriska's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Malmbergs Elektriska the TSR over the last 3 years was -55%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While the broader market gained around 1.4% in the last year, Malmbergs Elektriska shareholders lost 37% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6.1% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Keeping this in mind, a solid next step might be to take a look at Malmbergs Elektriska's dividend track record. This free interactive graph is a great place to start.

Of course Malmbergs Elektriska may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE 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.