Even the best stock pickers will make plenty of bad investments. Anyone who held ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) over the last year knows what a loser feels like. The share price has slid 70% in that time. Because ZIM Integrated Shipping Services hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 26% in about a quarter. That's not much fun for holders.

With the stock having lost 3.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for ZIM Integrated Shipping Services

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During the unfortunate twelve months during which the ZIM Integrated Shipping Services share price fell, it actually saw its earnings per share (EPS) improve by 65%. It's quite possible that growth expectations may have been unreasonable in the past.

It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.

We don't see any weakness in the ZIM Integrated Shipping Services' dividend so the steady payout can't really explain the share price drop. The revenue trend doesn't seem to explain why the share price is down. Unless, of course, the market was expecting a revenue uptick.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that ZIM Integrated Shipping Services has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for ZIM Integrated Shipping Services in this interactive graph of future profit estimates.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for ZIM Integrated Shipping Services the TSR over the last 1 year was -51%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

ZIM Integrated Shipping Services shareholders are down 51% for the year (even including dividends), even worse than the market loss of 23%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 26%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It's always interesting to track share price performance over the longer term. But to understand ZIM Integrated Shipping Services better, we need to consider many other factors. Take risks, for example - ZIM Integrated Shipping Services has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.