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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by SITI - B&T Group S.p.A. (BIT:SITI) shareholders over the last year, as the share price declined 49%. That's disappointing when you consider the market returned -0.5%. To make matters worse, the returns over three years have also been really disappointing (the share price is 48% lower than three years ago).
See our latest analysis for SITI - B&T Group
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...' 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.
Even though the SITI - B&T Group share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth. The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.
Revenue was pretty flat on last year, which isn't too bad. However, it is certainly possible the market was expecting an uptick in revenue, and that the share price fall reflects that disappointment.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
We know that SITI - B&T Group has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts
A Different Perspective
SITI - B&T Group shareholders are down 49% for the year, falling short of the market return. The market shed around 0.5%, no doubt weighing on the stock price. The three-year loss of 20% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Before forming an opinion on SITI - B&T Group you might want to consider these 3 valuation metrics.