The main goal of stock picking is to find the market-beating stocks. But the main game is to find enough winners to more than offset the losers. At this point, some shareholders may stop investing in The GPT Group (ASX:GPT) as the share price has fallen 25% over the past five years.

Since shareholder returns have been declining over the long term, let’s take a look at the underlying fundamentals over this period and see if they have matched the returns.

Check out our latest analysis for GPT Group

While the efficient markets hypothesis is still taught by some, it is well established that markets are over-reactive dynamic systems and investors do not always act rationally. One way to examine how market sentiment has changed over time is to examine the interaction between a company’s stock price and its earnings per share (EPS).

We know that GPT Group has made profits in the past. However, over the last twelve months it has made losses, which suggests that profit may not be a reliable measure at this point in time. Other measures may give us a better idea of ​​how its value changes over time.

The last dividend was even lower than in the past, which may have led to a decline in the share price.

You can see below how earnings and sales have developed over time (you can find out the exact values ​​by clicking on the image).

We like that insiders have been buying shares over the last twelve months. However, most people consider earnings and revenue growth trends to be a more meaningful indicator of the business, so it makes a lot of sense to look at what analysts think GPT Group will earn in the future (free earnings forecasts).

What about dividends?

It’s important to consider both the total shareholder return and the share price return for any stock. The TSR includes the value of any spin-offs or discounted capital raisings, as well as 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 dividend-paying stocks. In the case of GPT Group, the TSR over the last 5 years is -2.5%. That exceeds the share price return we mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!

A different perspective

It is nice to see that GPT Group shareholders received a total return of 19% over the last year. And that includes the dividend. In particular, the annualised TSR loss of 0.5% per year over five years compares very unfavourably with the recent share price performance. The long-term loss makes us cautious, but the short-term TSR gain certainly points to a brighter future. I find it very interesting to look at the share price as an indicator of business performance over the long term. But to really gain insights, we also need to consider other information. Like risks. Every company has them, and we have found 2 warning signals for the GPT Group (including 1 potentially serious!) that you should know about.

The story continues

GPT Group is not the only stock that insiders are buying. For those who like to find lesser-known companies The free A list of growing companies with recent insider purchases might be just the thing.

Please note that the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.