The one-year shareholder returns and company earnings persist lower as Hagag Group Real Estate Entrepreneurship (TLV:HGG) stock falls a further 17% in past week

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Hagag Group Real Estate Entrepreneurship Ltd (TLV:HGG) shareholders over the last year, as the share price declined 48%. That's disappointing when you consider the market declined 13%. On the bright side, the stock is actually up 0.9% in the last three years. Furthermore, it's down 25% in about a quarter. That's not much fun for holders.

After losing 17% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Hagag Group Real Estate Entrepreneurship

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Unfortunately Hagag Group Real Estate Entrepreneurship reported an EPS drop of 10% for the last year. This reduction in EPS is not as bad as the 48% share price fall. 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 5.28.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

While the broader market lost about 13% in the twelve months, Hagag Group Real Estate Entrepreneurship shareholders did even worse, losing 48% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 5%, 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 Hagag Group Real Estate Entrepreneurship better, we need to consider many other factors. For example, we've discovered 4 warning signs for Hagag Group Real Estate Entrepreneurship (2 are potentially serious!) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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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.