For many, the main point of investing is to generate higher returns than the overall market. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Panasonic Manufacturing Malaysia Berhad (KLSE:PANAMY), since the last five years saw the share price fall 59%. We also note that the stock has performed poorly over the last year, with the share price down 31%. Shareholders have had an even rougher run lately, with the share price down 26% in the last 90 days.

Now let’s have a look at the company’s fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

Our free stock report includes 1 warning sign investors should be aware of before investing in Panasonic Manufacturing Malaysia Berhad. Read for free now.

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

Looking back five years, both Panasonic Manufacturing Malaysia Berhad’s share price and EPS declined; the latter at a rate of 13% per year. This reduction in EPS is less than the 16% annual reduction in the share price. This implies that the market is more cautious about the business these days.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Panasonic Manufacturing Malaysia Berhad’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. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Panasonic Manufacturing Malaysia Berhad the TSR over the last 5 years was -46%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!

While the broader market lost about 3.8% in the twelve months, Panasonic Manufacturing Malaysia Berhad shareholders did even worse, losing 26% (even including dividends). Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 8% per year over five years. 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. 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. To that end, you should be aware of the 1 warning sign we’ve spotted with Panasonic Manufacturing Malaysia Berhad .