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 MITCON Consultancy & Engineering Services Limited (NSE:MITCON) have tasted that bitter downside in the last year, as the share price dropped 15%. That’s disappointing when you consider the market returned -4.5%. MITCON Consultancy & Engineering Services hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time.
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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 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.
MITCON Consultancy & Engineering Services 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 company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into MITCON Consultancy & Engineering Services’s key metrics by checking this interactive graph of MITCON Consultancy & Engineering Services’s earnings, revenue and cash flow.
A Different Perspective
We doubt MITCON Consultancy & Engineering Services shareholders are happy with the loss of 14% over twelve months (even including dividends). That falls short of the market, which lost 4.5%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. With the stock down 1.3% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. If you would like to research MITCON Consultancy & Engineering Services in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.