Natura &Co Holding (BVMF:NTCO3 shareholders incur further losses as stock declines 12% this week, taking one-year losses to 67%

By
Simply Wall St
Published
May 09, 2022
BOVESPA:NTCO3
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Even the best stock pickers will make plenty of bad investments. Unfortunately, shareholders of Natura &Co Holding S.A. (BVMF:NTCO3) have suffered share price declines over the last year. To wit the share price is down 67% in that time. Because Natura &Co Holding hasn't been listed for many years, the market is still learning about how the business performs. Even worse, it's down 39% in about a month, which isn't fun at all. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

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

View our latest analysis for Natura &Co Holding

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

A Different Perspective

Natura &Co Holding shareholders are down 67% for the year (even including dividends), even worse than the market loss of 14%. 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 21%, 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. It's always interesting to track share price performance over the longer term. But to understand Natura &Co Holding better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Natura &Co Holding , and understanding them should be part of your investment process.

Of course Natura &Co Holding 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 BR exchanges.

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