Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of OFX Group Limited (ASX:OFX) have had an unfortunate run in the last three years. Sadly for them, the share price is down 58% in that time. And more recent buyers are having a tough time too, with a drop of 28% in the last year. Furthermore, it’s down 22% in about a quarter. That’s not much fun for holders.

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.

We check all companies for important risks. See what we found for OFX Group in our free report.

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.

Although the share price is down over three years, OFX Group actually managed to grow EPS by 11% per year in that time. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Or else the company was over-hyped in the past, and so its growth has disappointed.

Since the change in EPS doesn’t seem to correlate with the change in share price, it’s worth taking a look at other metrics.

We note that, in three years, revenue has actually grown at a 17% annual rate, so that doesn’t seem to be a reason to sell shares. It’s probably worth investigating OFX Group further; while we may be missing something on this analysis, there might also be an opportunity.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

While the broader market gained around 5.8% in the last year, OFX Group shareholders lost 28%. 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. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 2% over the last half decade. 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. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of OFX Group by clicking this link.