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It is a pleasure to report that the ICICI Prudential Life Insurance Company Limited (NSE:ICICIPRULI) is up 31% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 12% in a year, falling short of the returns you could get by investing in an index fund.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Unfortunately ICICI Prudential Life Insurance reported an EPS drop of 40% for the last year. This fall in the EPS is significantly worse than the 12% 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 47.06 there is obviously some real optimism that earnings will bounce back.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
ICICI Prudential Life Insurance shareholders are down 11% for the year (even including dividends), even worse than the market loss of 0.6%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. It’s great to see a nice little 31% rebound in the last three months. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). If you would like to research ICICI Prudential Life Insurance in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course ICICI Prudential Life Insurance may not be the best stock to buy. So you may wish to see this free collection of growth stocks.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.