Investors Who Bought Nahar Industrial Enterprises (NSE:NAHARINDUS) Shares Three Years Ago Are Now Down 74%

As an investor, mistakes are inevitable. But you want to avoid the really big losses like the plague. So spare a thought for the long term shareholders of Nahar Industrial Enterprises Limited (NSE:NAHARINDUS); the share price is down a whopping 74% in the last three years. That would certainly shake our confidence in the decision to own the stock. And over the last year the share price fell 58%, so we doubt many shareholders are delighted. And the share price decline continued over the last week, dropping some 11%.

See our latest analysis for Nahar Industrial Enterprises

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. 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.

Over the three years that the share price declined, Nahar Industrial Enterprises's 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.

You can see how EPS has changed over time in the image below.

Dive deeper into Nahar Industrial Enterprises's key metrics by checking this interactive graph of Nahar Industrial Enterprises's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 5.9% in the last year, Nahar Industrial Enterprises shareholders lost 58%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 17% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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 editorial-team@simplywallst.com. 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.