Ardmore Shipping Corporation (NYSE:ASC) shareholders might be concerned after seeing the share price drop 29% in the last quarter. But at least the stock is up over the last five years. However we are not very impressed because the share price is only up 89%, less than the market return of 107%. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 43% decline over the last twelve months.

Let’s take a look at the underlying fundamentals over the longer term, and see if they’ve been consistent with shareholders returns.

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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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Ardmore Shipping moved from a loss to profitability. That’s generally thought to be a genuine positive, so investors may expect to see an increasing share price.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Ardmore Shipping has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Ardmore Shipping’s balance sheet strength is a great place to start, if you want to investigate the stock further.

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. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Ardmore Shipping, it has a TSR of 120% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

Investors in Ardmore Shipping had a tough year, with a total loss of 39% (including dividends), against a market gain of about 6.2%. 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. Longer term investors wouldn’t be so upset, since they would have made 17%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Ardmore Shipping (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.