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Even the best stock pickers will make plenty of bad investments. And unfortunately for Centrum Capital Limited (NSE:CENTRUM) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 54%. Centrum Capital hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 17% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
View our latest analysis for Centrum Capital
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 Centrum Capital share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past. The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.
With a low yield of 0.2% we doubt that the dividend influences the share price much. On the other hand, we're certainly perturbed by the 98% decline in Centrum Capital's revenue. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Centrum Capital's financial health with this free report on its balance sheet.
A Different Perspective
While Centrum Capital shareholders are down 54% 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. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before forming an opinion on Centrum Capital you might want to consider these 3 valuation metrics.