Introducing Mishra Dhatu Nigam (NSE:MIDHANI), A Stock That Climbed 11% In The Last Year

We believe investing is smart because history shows that stock markets go higher in the long term. But if you choose that path, you're going to buy some stocks that fall short of the market. Unfortunately for shareholders, while the Mishra Dhatu Nigam Limited (NSE:MIDHANI) share price is up 11% in the last year, that falls short of the market return. We'll need to follow Mishra Dhatu Nigam for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for Mishra Dhatu Nigam

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).

Over the last twelve months, Mishra Dhatu Nigam actually shrank its EPS by 15%.

So we don't think that investors are paying too much attention to EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We are skeptical of the suggestion that the 1.4% dividend yield would entice buyers to the stock. Mishra Dhatu Nigam's revenue actually dropped 13% over last year. So the fundamental metrics don't provide an obvious explanation for the share price gain.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Mishra Dhatu Nigam's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Mishra Dhatu Nigam shareholders have gained 13% for the year (even including dividends). The bad news is that's no better than the average market return, which was roughly 17%. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Mishra Dhatu Nigam has 2 warning signs (and 1 which can't be ignored) we think you should know about.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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