If You Had Bought Delphi Technologies (NYSE:DLPH) Stock A Year Ago, You'd Be Sitting On A 70% Loss, Today
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Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Delphi Technologies PLC (NYSE:DLPH) have suffered share price declines over the last year. To wit the share price is down 70% in that time. We wouldn't rush to judgement on Delphi Technologies because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 31% in the last three months.
See our latest analysis for Delphi Technologies
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 Delphi Technologies reported an EPS drop of 1.4% for the last year. The share price decline of 70% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business. The P/E ratio of 4.90 also points to the negative market sentiment.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Delphi Technologies's earnings, revenue and cash flow.
A Different Perspective
While Delphi Technologies shareholders are down 70% for the year, the market itself is up 0.3%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 31%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Delphi Technologies is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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 editorial-team@simplywallst.com. 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.
