It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by Dogness (International) Corporation (NASDAQ:DOGZ) shareholders over the last year, as the share price declined 21%. That falls noticeably short of the market return of around 10%. Because Dogness (International) hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 21% in the last three months.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 Dogness (International) reported an EPS drop of 33% for the last year. This fall in the EPS is significantly worse than the 21% the share price fall. It may have been that the weak EPS was not as bad as some had feared.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
Given that the market gained 10% in the last year, Dogness (International) shareholders might be miffed that they lost 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Before forming an opinion on Dogness (International) you might want to consider these 3 valuation metrics.
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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 US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.