A Look At South Indian Bank's (NSE:SOUTHBANK) Share Price Returns

It is a pleasure to report that the The South Indian Bank Limited (NSE:SOUTHBANK) is up 41% in the last quarter. But the last three years have seen a terrible decline. To wit, the share price sky-dived 71% in that time. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.

Check out our latest analysis for South Indian Bank

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).

South Indian Bank saw its EPS decline at a compound rate of 33% per year, over the last three years. The 34% average annual share price decline is remarkably close to the EPS decline. So it seems that investor expectations of the company are staying pretty steady, despite the disappointment. It seems like the share price is reflecting the declining earnings per share.

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

Dive deeper into South Indian Bank's key metrics by checking this interactive graph of South Indian Bank's earnings, revenue and cash flow.

A Different Perspective

Investors in South Indian Bank had a tough year, with a total loss of 15%, against a market gain of about 18%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - South Indian Bank has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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