Market is not liking Minerva's (BVMF:BEEF3) earnings decline as stock retreats 8.4% this week

Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Minerva S.A. (BVMF:BEEF3) shareholders over the last year, as the share price declined 33%. That's well below the market decline of 4.6%. We note that it has not been easy for shareholders over three years, either; the share price is down 32% in that time. And the share price decline continued over the last week, dropping some 8.4%.

If the past week is anything to go by, investor sentiment for Minerva isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Minerva

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Unfortunately Minerva reported an EPS drop of 85% for the last year. The share price fall of 33% isn't as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Minerva's key metrics by checking this interactive graph of Minerva's earnings, revenue and cash flow.

A Different Perspective

Investors in Minerva had a tough year, with a total loss of 32% (including dividends), against a market gain of about 4.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.5% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for Minerva (1 is concerning) that you should be aware of.

Of course Minerva may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Brazilian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com