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It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. So spare a thought for the long term shareholders of Borosil Glass Works Limited (NSE:BOROSIL); the share price is down a whopping 81% in the last twelve months. While some investors are willing to stomach this sort of loss, they are usually professionals who spread their bets thinly. We wouldn't rush to judgement on Borosil Glass Works because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 17% in the last 90 days.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
Check out our latest analysis for Borosil Glass Works
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, Borosil Glass Works had to report a 65% decline in EPS over the last year. The share price decline of 81% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how Borosil Glass Works has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While Borosil Glass Works shareholders are down 81% for the year (even including dividends), the market itself is up 0.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 17%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Before forming an opinion on Borosil Glass Works you might want to consider these 3 valuation metrics.
Of course Borosil Glass Works may not be the best stock to buy. So you may wish to see this free collection of growth stocks.