Investors one-year losses continue as M+S Hydraulic AD (BUL:MSH) dips a further 49% this week, earnings continue to decline

You can invest in an index fund if you want to make sure your returns approximately match the overall market. But in any given year a good portion of stocks will fall short of that. For example, that's what happened with M+S Hydraulic AD (BUL:MSH) over the last year - it's share price is down 46% versus a market decline of 38%. Even if you look out three years, the returns are still disappointing, with the share price down42% in that time. The last week also saw the share price slip down another 49%. However, this move may have been influenced by the broader market, which fell 46% in that time.

After losing 49% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Unfortunately M+S Hydraulic AD reported an EPS drop of 20% for the last year. This reduction in EPS is not as bad as the 46% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

We regret to report that M+S Hydraulic AD shareholders are down 45% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 38%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 0.2%, 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. It's always interesting to track share price performance over the longer term. But to understand M+S Hydraulic AD better, we need to consider many other factors. Take risks, for example - M+S Hydraulic AD has 3 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Bulgarian 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.