The one-year shareholder returns and company earnings persist lower as Global Industrial (NYSE:GIC) stock falls a further 5.9% in past week

It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Global Industrial Company (NYSE:GIC) shareholders over the last year, as the share price declined 47%. That falls noticeably short of the market return of around 4.0%. To make matters worse, the returns over three years have also been really disappointing (the share price is 32% lower than three years ago). Furthermore, it's down 16% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 16% in the same period.

If the past week is anything to go by, investor sentiment for Global Industrial isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

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

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Unfortunately Global Industrial reported an EPS drop of 15% for the last year. This reduction in EPS is not as bad as the 47% share price fall. So it seems the market was too confident about the business, a year ago.

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

Dive deeper into Global Industrial's key metrics by checking this interactive graph of Global Industrial's earnings, revenue and cash flow.

A Different Perspective

Global Industrial shareholders are down 45% for the year (even including dividends), but the market itself is up 4.0%. 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. On the bright side, long term shareholders have made money, with a gain of 6% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Importantly, we haven't analysed Global Industrial's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

But note: Global Industrial may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.