Even the best stock pickers will make plenty of bad investments. And there's no doubt that PATRIZIA SE (ETR:PAT) stock has had a really bad year. The share price is down a hefty 54% in that time. Notably, shareholders had a tough run over the longer term, too, with a drop of 51% in the last three years. But it's up 7.8% in the last week.
On a more encouraging note the company has added €61m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Check out our latest analysis for PATRIZIA
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 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.
Even though the PATRIZIA share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth.
By glancing at these numbers, we'd posit that the the market had expectations of much higher growth, last year. But looking to other metrics might better explain the share price change.
PATRIZIA managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at PATRIZIA's financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 19% in the twelve months, PATRIZIA shareholders did even worse, losing 52% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for PATRIZIA you should know about.