Edgewell Personal Care’s (NYSE:EPC) earnings and shareholder returns have trended down over the past five years, but the stock is up 8.1% over the past week

To justify the hassle of stock picking, it pays to beat the returns of a market index fund. But even the best stock picker only wins with some Selection. So we wouldn’t blame it in the long run Edgewell Personal Care Company (NYSE:EPC) for doubting its decision as the stock has fallen 51% in half a decade. But it’s up 8.1% over the past week. However, that could be related to the strong market, which has seen shares rise about 5.9% at the same time.

More encouragingly, the company increased its market cap by $145 million in the last 7 days. Let’s see if we can figure out what caused the five-year loss to shareholders.

Check out our latest analysis for Edgewell Personal Care

While the efficient markets hypothesis continues to be taught by some, evidence shows that markets are over-reactive dynamic systems and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

During the five years that the stock price declined, Edgewell Personal Care’s earnings per share (EPS) fell 6.9% each year. Readers should note that the stock price fell at a rate of 13% per year at a faster rate than earnings per share during the period. This implies that the market is more cautious about the business these days.

The graph below shows how the EPS has changed over time (click on the image to see the exact values).

Earnings per share growth

Earnings per share growth

We know Edgewell Personal Care has improved its bottom line lately, but will it increase sales? You could check this free Report with sales forecasts from analysts.

A different perspective

While the broader market fell about 8.9% over the 12 months, Edgewell Personal Care shareholders fared even worse, losing 18% (even including dividends). However, it is inevitable that some stocks will become oversold in a falling market. It is important to keep an eye on the fundamental developments. Unfortunately, last year’s performance could point to unresolved challenges, as it was worse than the 8% annualized loss over the last half decade. We are aware that Baron Rothschild said investors should “buy when there is blood in the streets” but caution that investors should first be confident they are buying a quality company. It is always interesting to follow stock price developments over the longer term. But to better understand Edgewell Personal Care, we need to consider many other factors. For example, we have identified 4 Warning Signs for Edgewell Personal Care (1 is possibly serious) that you should know.

Of course Edgewell Personal Care might not be the best stock to buy. You might want to see this free Collection of growth stocks.

Please note that the market returns reported in this article reflect the market-weighted average returns of stocks currently traded on US exchanges.

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

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