RBG Holdings' (LON:RBGP) Stock Price Has Reduced 36% In The Past Year

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in RBG Holdings plc (LON:RBGP) have tasted that bitter downside in the last year, as the share price dropped 36%. That falls noticeably short of the market decline of around 6.8%. Because RBG Holdings hasn't been listed for many years, the market is still learning about how the business performs.

View our latest analysis for RBG Holdings

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 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, RBG Holdings had to report a 15% decline in EPS over the last year. The share price decline of 36% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. The less favorable sentiment is reflected in its current P/E ratio of 10.42.

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

This free interactive report on RBG Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

RBG Holdings shareholders are down 35% for the year (even including dividends), even worse than the market loss of 6.8%. 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 2.0%, 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 RBG Holdings better, we need to consider many other factors. Even so, be aware that RBG Holdings is showing 3 warning signs in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

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This article by Simply Wall St is general in nature. 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.
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