Published on 22 Jan 2021 on Simply Wall St. via Yahoo Finance

Insurance Australia Group's (ASX:IAG) Shareholders Are Down 34% On Their Shares

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Insurance Australia Group Limited (ASX:IAG) shareholders, since the share price is down 34% in the last three years, falling well short of the market return of around 25%. The more recent news is of little comfort, with the share price down 31% in a year. It's down 2.2% in the last seven days.

See our latest analysis for Insurance Australia Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).