Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Power & Instrumentation (Gujarat) Limited (NSE:PIGL) have suffered share price declines over the last year. The share price is down a hefty 54% in that time. Power & Instrumentation (Gujarat) may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 13% in the last three months. Of course, this share price action may well have been influenced by the 8.4% decline in the broader market, throughout the period.
View our latest analysis for Power & Instrumentation (Gujarat)
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...' 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.
During the unfortunate twelve months during which the Power & Instrumentation (Gujarat) share price fell, it actually saw its earnings per share (EPS) improve by 14%. It could be that the share price was previously over-hyped. 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.
Power & Instrumentation (Gujarat)'s revenue is actually up 21% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Power & Instrumentation (Gujarat)'s financial health with this free report on its balance sheet.
A Different Perspective
We doubt Power & Instrumentation (Gujarat) shareholders are happy with the loss of 54% over twelve months. That falls short of the market, which lost 11%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 13%, 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. You could get a better understanding of Power & Instrumentation (Gujarat)'s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.