While not a mind-blowing move, it is good to see that the Prataap Snacks Limited (NSE:DIAMONDYD) share price has gained 25% in the last three months. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 12% in the last year, well below the market return.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Unfortunately Prataap Snacks reported an EPS drop of 4.5% for the last year. The share price decline of 12% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Prataap Snacks's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While Prataap Snacks shareholders are down 12% for the year (even including dividends) , the market itself is up 8.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 25% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Before forming an opinion on Prataap Snacks you might want to consider these 3 valuation metrics.
Of course Prataap Snacks may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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