Would Shareholders Who Purchased Bodal Chemicals' (NSE:BODALCHEM) Stock Three Years Be Happy With The Share price Today?

Bodal Chemicals Limited (NSE:BODALCHEM) shareholders should be happy to see the share price up 22% in the last quarter. But over the last three years we've seen a quite serious decline. Tragically, the share price declined 54% in that time. So it is really good to see an improvement. After all, could be that the fall was overdone.

View our latest analysis for Bodal Chemicals

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 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 the three years that the share price fell, Bodal Chemicals' earnings per share (EPS) dropped by 39% each year. This fall in the EPS is worse than the 23% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Bodal Chemicals provided a TSR of 16% over the last twelve months. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 9% per year over five year. It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Bodal Chemicals better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Bodal Chemicals you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course Bodal Chemicals 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.

When trading Bodal Chemicals or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.