Stock Analysis

Reflecting on Ratio Oil Exploration (1992) Limited Partnership's (TLV:RATI.L) Share Price Returns Over The Last Year

TASE:RATI
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While not a mind-blowing move, it is good to see that the Ratio Oil Exploration (1992) Limited Partnership (TLV:RATI.L) share price has gained 15% in the last three months. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 42% in one year, under-performing the market.

Check out our latest analysis for Ratio Oil Exploration (1992) Limited Partnership

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Ratio Oil Exploration (1992) Limited Partnership managed to increase earnings per share from a loss to a profit, over the last 12 months.

Earnings per share growth rates aren't particularly useful for comparing with the share price, when a company has moved from loss to profit. So it makes sense to check out some other factors.

Revenue was pretty flat on last year, which isn't too bad. But the share price might be lower because the market expected a meaningful improvement, and got none.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
TASE:RATI.L Earnings and Revenue Growth January 25th 2021

If you are thinking of buying or selling Ratio Oil Exploration (1992) Limited Partnership stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Ratio Oil Exploration (1992) Limited Partnership shareholders are down 42% for the year, but the market itself is up 4.0%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Case in point: We've spotted 2 warning signs for Ratio Oil Exploration (1992) Limited Partnership you should be aware of, and 1 of them makes us a bit uncomfortable.

We will like Ratio Oil Exploration (1992) Limited Partnership 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 IL exchanges.

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