Would Shareholders Who Purchased Jain Irrigation Systems' (NSE:JISLJALEQS) Stock Three Years Be Happy With The Share price Today?

While it may not be enough for some shareholders, we think it is good to see the Jain Irrigation Systems Limited (NSE:JISLJALEQS) share price up 27% in a single quarter. But the last three years have seen a terrible decline. Indeed, the share price is down a whopping 85% in the last three years. So we're relieved for long term holders to see a bit of uplift. But the more important question is whether the underlying business can justify a higher price still.

While a drop like that is definitely a body blow, money isn't as important as health and happiness.

View our latest analysis for Jain Irrigation Systems

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. 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.

Over the three years that the share price declined, Jain Irrigation Systems' earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

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

Dive deeper into Jain Irrigation Systems' key metrics by checking this interactive graph of Jain Irrigation Systems's earnings, revenue and cash flow.

A Different Perspective

Jain Irrigation Systems provided a TSR of 4.1% over the last twelve months. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 12% per year, over five years. It could well be that the business is stabilizing. 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. For example, we've discovered 4 warning signs for Jain Irrigation Systems (2 are a bit unpleasant!) that you should be aware of before investing here.

We will like Jain Irrigation Systems 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 IN exchanges.

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