Investors five-year losses grow to 59% as the stock sheds ₹3.9b this past week

By
Simply Wall St
Published
January 25, 2022
NSEI:JSWISPL
Source: Shutterstock

JSW Ispat Special Products Limited (NSE:JSWISPL) shareholders should be happy to see the share price up 15% in the last quarter. But that is little comfort to those holding over the last half decade, sitting on a big loss. Indeed, the share price is down 59% in the period. So we're hesitant to put much weight behind the short term increase. However, in the best case scenario (far from fait accompli), this improved performance might be sustained.

With the stock having lost 19% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for JSW Ispat Special Products

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. 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.

JSW Ispat Special Products became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

In contrast to the share price, revenue has actually increased by 31% a year in the five year period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
NSEI:JSWISPL Earnings and Revenue Growth January 25th 2022

This free interactive report on JSW Ispat Special Products' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

JSW Ispat Special Products shareholders are up 25% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 10% per year, over five years. So this might be a sign the business has turned its fortunes around. 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 1 warning sign with JSW Ispat Special Products , and understanding them should be part of your investment process.

But note: JSW Ispat Special Products may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.