Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don't succeed. To wit, the OC Oerlikon Corporation AG (VTX:OERL) share price managed to fall 68% over five long years. That's an unpleasant experience for long term holders. And we doubt long term believers are the only worried holders, since the stock price has declined 46% over the last twelve months. The falls have accelerated recently, with the share price down 14% in the last three months. But this could be related to the weak market, which is down 6.6% in the same period.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for OC Oerlikon

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, OC Oerlikon moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.

The steady dividend doesn't really explain why the share price is down. It's not immediately clear to us why the stock price is down but further research might provide some answers.

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 know that OC Oerlikon has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at OC Oerlikon's financial health with this free report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, OC Oerlikon's TSR for the last 5 years was -54%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

While the broader market lost about 2.9% in the twelve months, OC Oerlikon shareholders did even worse, losing 42% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand OC Oerlikon better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for OC Oerlikon (of which 2 shouldn't be ignored!) you should know about.