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Investors can approximate the average market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Vidhi Specialty Food Ingredients Limited (NSE:VIDHIING) share price slid 30% over twelve months. That falls noticeably short of the market return of around -12%. The silver lining (for longer term investors) is that the stock is still 11% higher than it was three years ago. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days. However, one could argue that the price has been influenced by the general market, which is down 9.9% in the same timeframe.
Check out our latest analysis for Vidhi Specialty Food Ingredients
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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the Vidhi Specialty Food Ingredients share price fell, it actually saw its earnings per share (EPS) improve by 46%. Of course, the situation might betray previous over-optimism about growth. It's fair to say that the share price does not seem to be reflecting the EPS growth. But we might find some different metrics explain the share price movements better.
Given the yield is quite low, at 1.4%, we doubt the dividend can shed much light on the share price. Vidhi Specialty Food Ingredients's revenue is actually up 6.4% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Vidhi Specialty Food Ingredients will earn in the future (free profit forecasts).
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Vidhi Specialty Food Ingredients's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Vidhi Specialty Food Ingredients's TSR of was a loss of 29% for the year. That wasn't as bad as its share price return, because it has paid dividends.