Investors one-year losses continue as Bulgarian-American Credit Bank AD (BUL:BACB) dips a further 49% this week, earnings continue to decline

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Bulgarian-American Credit Bank AD (BUL:BACB) shareholders over the last year, as the share price declined 45%. That falls noticeably short of the market decline of around 23%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 4.0% in three years. And the share price decline continued over the last week, dropping some 49%. However, this move may have been influenced by the broader market, which fell 30% in that time.

With the stock having lost 49% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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, Bulgarian-American Credit Bank AD had to report a 30% decline in EPS over the last year. This reduction in EPS is not as bad as the 45% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock. The less favorable sentiment is reflected in its current P/E ratio of 7.14.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Bulgarian-American Credit Bank AD's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 23% in the twelve months, Bulgarian-American Credit Bank AD shareholders did even worse, losing 45% (even including dividends). 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. On the bright side, long term shareholders have made money, with a gain of 0.8% per year over half a decade. 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 Bulgarian-American Credit Bank AD better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Bulgarian-American Credit Bank AD , and understanding them should be part of your investment process.

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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.