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Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in Aster DM Healthcare Limited (NSE:ASTERDM) have tasted that bitter downside in the last year, as the share price dropped 27%. That's disappointing when you consider the market returned -4.9%. Aster DM Healthcare hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 18% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
See our latest analysis for Aster DM Healthcare
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.
Even though the Aster DM Healthcare share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped. The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
Aster DM Healthcare's revenue is actually up 18% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Aster DM Healthcare in this interactive graph of future profit estimates.
A Different Perspective
Aster DM Healthcare shareholders are down 27% for the year, even worse than the market loss of 4.9%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 18% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Aster DM Healthcare by clicking this link.