Investors Who Bought MEP Infrastructure Developers (NSE:MEP) Shares A Year Ago Are Now Down 44%
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in MEP Infrastructure Developers Limited (NSE:MEP) have tasted that bitter downside in the last year, as the share price dropped 44%. That's disappointing when you consider the market returned -12%. To make matters worse, the returns over three years have also been really disappointing (the share price is 34% lower than three years ago). The falls have accelerated recently, with the share price down 24% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Check out our latest analysis for MEP Infrastructure Developers
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).
Unhappily, MEP Infrastructure Developers had to report a 62% decline in EPS over the last year. This fall in the EPS is significantly worse than the 44% the share price fall. It may have been that the weak EPS was not as bad as some had feared.
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on MEP Infrastructure Developers's earnings, revenue and cash flow.
A Different Perspective
MEP Infrastructure Developers shareholders are down 43% for the year (even including dividends), falling short of the market return. The market shed around 12%, no doubt weighing on the stock price. The three-year loss of 13% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of MEP Infrastructure Developers by clicking this link.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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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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.