To justify the efforts to select individual stocks, it is worth striving to outperform the performance of the market index fund. But in any portfolio, the results for individual stocks will be mixed. At the moment, some shareholders may have doubts about their investment in Charter Hall Retail Real Estate Investment Fund (ASX: CQR), because over the past five years the share price has dropped by 21%. Over the past seven days, it has decreased by 3.3%.
In his essay Graham and Doddsville superinvestors Warren Buffett described how stock prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and the change in share price over time, we can understand how the attitude of investors towards a company has changed over time.
Looking back five years, Charter Hall retail real estate investment fund share price and earnings per share declined; the latter at a rate of 25% per year. This EPS drop is worse than a 5% cumulative drop in the share price per year. Thus, investors may expect earnings per share to return to normal – or they may have previously anticipated a decline in earnings per share.
The image below shows how EPS has been tracked over time (if you click on the image, you will see more details).
This is free interactive report on investment fund Charter Hall Retail Real Estate profit, revenue and cash flow is a great place to start if you want to continue exploring stocks.
What about dividends?
When considering the return on investment, it is important to consider the difference between total shareholder income (TSR) and stock returns… While the share price yield only reflects the change in the share price, the TSR includes the cost of dividends (assuming they have been reinvested) and the benefits of any discounted capital raising or spin-off. It’s fair to say that TSR provides a more complete picture for stocks that pay dividends. In the case of the Charter Hall retail real estate investment fund, its TSR has been 8.4% over the past 5 years. This exceeds the return on his stock we mentioned earlier. And it’s okay to guess that the dividend payout explains a lot of the discrepancy!
Retail investment fund Charter Hall has secured 17% TSR over the past twelve months. Unfortunately, this is not in line with market returns. On the positive side, the earnings were actually better than the average annualized rate of return of 1.6% per annum for five years. It is possible that profitability will improve along with the fundamentals of the business. It is always interesting to track the dynamics of stock prices over the long term. But to better understand the Charter Hall retail real estate investment fund, we need to consider many other factors. Case in point: we noticed 4 warning signs for the Charter Hall retail real estate investment fund you should know, and two of them make us uncomfortable.
Sure, you can find a fantastic investment by looking elsewhere. So take a look at this is free list of companies, we expect profit growth.
Please note that the market returns shown in this article reflect the weighted average market returns for stocks currently listed on Australian exchanges.
This article by Simply Wall St is general in nature. It is not a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not include the latest announcements from price-sensitive companies or quality content. Simply Wall St has no position in any of the mentioned promotions.
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