Stock Analysis

6.9% earnings growth over 1 year has not materialized into gains for Danel (Adir Yeoshua) (TLV:DANE) shareholders over that period

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TASE:DANE
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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Danel (Adir Yeoshua) Ltd (TLV:DANE) have suffered share price declines over the last year. The share price is down a hefty 63% in that time. Longer term investors have fared much better, since the share price is up 11% in three years. The last week also saw the share price slip down another 11%.

Since Danel (Adir Yeoshua) has shed ₪163m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Danel (Adir Yeoshua)

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).

Even though the Danel (Adir Yeoshua) share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past.

The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.

We don't see any weakness in the Danel (Adir Yeoshua)'s dividend so the steady payout can't really explain the share price drop. The revenue trend doesn't seem to explain why the share price is down. Of course, it could simply be that it simply fell short of the market consensus expectations.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
TASE:DANE Earnings and Revenue Growth March 15th 2023

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We regret to report that Danel (Adir Yeoshua) shareholders are down 61% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 21%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Danel (Adir Yeoshua) better, we need to consider many other factors. For instance, we've identified 1 warning sign for Danel (Adir Yeoshua) that you should be aware of.

We will like Danel (Adir Yeoshua) better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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Find out whether Danel (Adir Yeoshua) 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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