Volatility 101: Should Sanghvi Forging & Engineering (NSE:SANGHVIFOR) Shares Have Dropped 42%?

Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Sanghvi Forging & Engineering Limited (NSE:SANGHVIFOR) shareholders, since the share price is down 42% in the last three years, falling well short of the market return of around 48%. The good news is that the stock is up 3.3% in the last week.

View our latest analysis for Sanghvi Forging & Engineering

Because Sanghvi Forging & Engineering is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

This free interactive report on Sanghvi Forging & Engineering's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 0.9% in the last year, Sanghvi Forging & Engineering shareholders lost 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4.9%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Sanghvi Forging & Engineering it might be wise to click here to see if insiders have been buying or selling shares.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of companies that have proven they can grow earnings.

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 editorial-team@simplywallst.com. 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.