Bharat Wire Ropes (NSE:BHARATWIRE) delivers shareholders notable 21% CAGR over 3 years, surging 10% in the last week alone

Published
June 28, 2022
NSEI:BHARATWIRE
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By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Bharat Wire Ropes Limited (NSE:BHARATWIRE) share price is up 77% in the last three years, clearly besting the market return of around 39% (not including dividends).

The past week has proven to be lucrative for Bharat Wire Ropes investors, so let's see if fundamentals drove the company's three-year performance.

View our latest analysis for Bharat Wire Ropes

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, Bharat Wire Ropes moved from a loss to profitability. So we would expect a higher share price over the period.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
NSEI:BHARATWIRE Earnings Per Share Growth June 28th 2022

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

A Different Perspective

Investors in Bharat Wire Ropes had a tough year, with a total loss of 13%, against a market gain of about 0.7%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. 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. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Bharat Wire Ropes (at least 1 which is concerning) , and understanding them should be part of your investment process.

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.

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