Barry Callebaut (VTX:BARN) investors are sitting on a loss of 10% if they invested a year ago

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. Investors in Barry Callebaut AG (VTX:BARN) have tasted that bitter downside in the last year, as the share price dropped 12%. That's disappointing when you consider the market declined 2.1%. At least the damage isn't so bad if you look at the last three years, since the stock is down 1.7% in that time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for Barry Callebaut

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Unhappily, Barry Callebaut had to report a 8.0% decline in EPS over the last year. This reduction in EPS is not as bad as the 12% share price fall. So it seems the market was too confident about the business, a year ago.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

Investors in Barry Callebaut had a tough year, with a total loss of 10% (including dividends), against a market gain of about 2.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Even so, be aware that Barry Callebaut is showing 1 warning sign in our investment analysis , you should know about...

But note: Barry Callebaut may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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