Stock Analysis

Duro Felguera (BME:MDF) shareholders notch a 37% CAGR over 3 years, yet earnings have been shrinking

  •  Updated
BME:MDF
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While Duro Felguera, S.A. (BME:MDF) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 10% in the last quarter. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. In three years the stock price has launched 159% higher: a great result. So the recent fall in the share price should be viewed in that context. Only time will tell if there is still too much optimism currently reflected in the share price.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Duro Felguera

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).

Duro Felguera became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
BME:MDF Earnings Per Share Growth August 7th 2022

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While it's never nice to take a loss, Duro Felguera shareholders can take comfort that their trailing twelve month loss of 3.2% wasn't as bad as the market loss of around 4.4%. What is more upsetting is the 13% per annum loss investors have suffered over the last half decade. This sort of share price action isn't particularly encouraging, but at least the losses are slowing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Duro Felguera (of which 2 are potentially serious!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Valuation is complex, but we're helping make it simple.

Find out whether Duro Felguera is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About BME:MDF

Duro Felguera

Duro Felguera, S.A. executes turnkey projects for the energy, industrial, and oil and gas facilities in Spain, Latin America, Europe, Africa, Asia, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth0
Past Performance2
Financial Health0
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Slightly overvalued with questionable track record.