United Company RUSAL, International Public Joint-Stock Company (HKG:486) shareholders will doubtless be very grateful to see the share price up 33% in the last quarter. But that doesn't change the fact that the returns over the last three years have been disappointing. In that time, the share price dropped 59%. So it is really good to see an improvement. Perhaps the company has turned over a new leaf.

Since United Company RUSAL International has shed HK$7.5b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

During the three years that the share price fell, United Company RUSAL International's earnings per share (EPS) dropped by 47% each year. This fall in the EPS is worse than the 25% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on United Company RUSAL International'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 United Company RUSAL International'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. United Company RUSAL International's TSR of was a loss of 57% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

United Company RUSAL International provided a TSR of 17% over the year. That's fairly close to the broader market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 0.6%, which was endured over half a decade. We're pretty skeptical of turnaround stories, but it's good to see the recent share price recovery. It's always interesting to track share price performance over the longer term. But to understand United Company RUSAL International better, we need to consider many other factors. Even so, be aware that United Company RUSAL International is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

But note: United Company RUSAL International may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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