Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. We regret to report that long term OVB Holding AG (ETR:O4B) shareholders have had that experience, with the share price dropping 11% in three years, versus a market return of about 54%. It’s down 11% in about a quarter.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they’ve been consistent with returns.

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

Although the share price is down over three years, OVB Holding actually managed to grow EPS by 1.5% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

With EPS gaining and a declining share price, one would suggest the market is cooling on its view of the company. Of course, this could spell opportunity because if the EPS growth continues long term, it seems very likely the share price will rise too.

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

Dive deeper into OVB Holding’s key metrics by checking this interactive graph of OVB Holding’s earnings, revenue and cash flow.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, OVB Holding’s TSR for the last 3 years was 1.2%, which exceeds the share price return mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!

OVB Holding provided a TSR of 4.0% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 5% a year, over half a decade) look better. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. It’s always interesting to track share price performance over the longer term. But to understand OVB Holding better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for OVB Holding (of which 1 is significant!) you should know about.