Shareholders in Dilip Buildcon (NSE:DBL) have lost 49%, as stock drops 14% this past week

By
Simply Wall St
Published
February 19, 2022
NSEI:DBL
Source: Shutterstock

Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Dilip Buildcon Limited (NSE:DBL) have tasted that bitter downside in the last year, as the share price dropped 49%. That falls noticeably short of the market return of around 23%. Notably, shareholders had a tough run over the longer term, too, with a drop of 32% in the last three years. The falls have accelerated recently, with the share price down 47% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

After losing 14% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Dilip Buildcon

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Dilip Buildcon fell to a loss making position during the year. Some investors no doubt dumped the stock as a result. However, there may be an opportunity for investors if the company can recover.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NSEI:DBL Earnings Per Share Growth February 19th 2022

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Dilip Buildcon shareholders are down 49% for the year (even including dividends), but the market itself is up 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 0.8% per year over half a decade. 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 Dilip Buildcon better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Dilip Buildcon (including 2 which make us uncomfortable) .

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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