Investing in stocks inevitably means buying into some companies that perform poorly. Long term Feintool International Holding AG (VTX:FTON) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 76% drop in the share price over that period. And over the last year the share price fell 36%, so we doubt many shareholders are delighted. Shareholders have had an even rougher run lately, with the share price down 16% in the last 90 days.

With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

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There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Over the three years that the share price declined, Feintool International Holding’s earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it’s not easy to use EPS as a reliable guide to the business. But it’s safe to say we’d generally expect the share price to be lower as a result!

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here .

We’d be remiss not to mention the difference between Feintool International Holding’s total shareholder return (TSR) and its 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. Dividends have been really beneficial for Feintool International Holding shareholders, and that cash payout explains why its total shareholder loss of 62%, over the last 3 years, isn’t as bad as the share price return.

While the broader market lost about 0.03% in the twelve months, Feintool International Holding shareholders did even worse, losing 34%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. 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 Feintool International Holding .