The truth is that if you invest for long enough, you’re going to end up with some losing stocks. But long term Entertainment Network (India) Limited (NSE:ENIL) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 69% decline in the share price in that time. And over the last year the share price fell 54%, so we doubt many shareholders are delighted.
See our latest analysis for Entertainment Network (India)
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).
Entertainment Network (India) saw its EPS decline at a compound rate of 17% per year, over the last three years. This reduction in EPS is slower than the 32% annual reduction in the share price. So it seems the market was too confident about the business, in the past.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
This free interactive report on Entertainment Network (India)’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market gained around 8.9% in the last year, Entertainment Network (India) shareholders lost 54% (even including dividends) . Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 14% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Case in point: We’ve spotted 1 warning sign for Entertainment Network (India) you should be aware of.
Of course Entertainment Network (India) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.