The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Hindcon Chemicals Limited (NSE:HINDCON) shareholders over the last year, as the share price declined 12%. That contrasts poorly with the market return of -0.6%. Hindcon Chemicals hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. It's down 14% in about a quarter.
View our latest analysis for Hindcon Chemicals
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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, Hindcon Chemicals had to report a 19% decline in EPS over the last year. The share price fall of 12% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Hindcon Chemicals's key metrics by checking this interactive graph of Hindcon Chemicals's earnings, revenue and cash flow.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Hindcon Chemicals's TSR for the last year was -9.2%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We doubt Hindcon Chemicals shareholders are happy with the loss of 9.2% over twelve months (even including dividends) . That falls short of the market, which lost 0.6%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. Notably, the loss over the last year isn't as bad as the 14% drop in the last three months. So it seems like some holders have been dumping the stock of late - and that's not bullish. Before spending more time on Hindcon Chemicals it might be wise to click here to see if insiders have been buying or selling shares.