CompoSecure (NASDAQ:CMPO shareholders incur further losses as stock declines 11% this week, taking one-year losses to 32%

Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the CompoSecure, Inc. (NASDAQ:CMPO) share price is down 32% in the last year. That falls noticeably short of the market return of around 16%. Because CompoSecure hasn't been listed for many years, the market is still learning about how the business performs. More recently, the share price has dropped a further 32% in a month.

With the stock having lost 11% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for CompoSecure

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

A Different Perspective

Given that the market gained 16% in the last year, CompoSecure shareholders might be miffed that they lost 32%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 31%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand CompoSecure better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for CompoSecure (of which 2 don't sit too well with us!) 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 US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.