How Much Did CreditAccess Grameen's(NSE:CREDITACC) Shareholders Earn From Share Price Movements Over The Last Year?

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the CreditAccess Grameen Limited (NSE:CREDITACC) share price is down 19% in the last year. That's disappointing when you consider the market returned 35%. CreditAccess Grameen hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 14% in the last three months.

See our latest analysis for CreditAccess Grameen

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Unhappily, CreditAccess Grameen had to report a 73% decline in EPS over the last year. This fall in the EPS is significantly worse than the 19% the share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster. Indeed, with a P/E ratio of 96.05 there is obviously some real optimism that earnings will bounce back.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

While CreditAccess Grameen shareholders are down 19% for the year, the market itself is up 35%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 14% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - CreditAccess Grameen has 4 warning signs (and 1 which is potentially serious) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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