Even the best stock pickers will make plenty of bad investments. Anyone who held High Ground Enterprise Ltd. (NSE:HIGHGROUND) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 51%. Because High Ground Enterprise hasn't been listed for many years, the market is still learning about how the business performs. Shareholders have had an even rougher run lately, with the share price down 22% in the last 90 days.
See our latest analysis for High Ground Enterprise
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.
During the unfortunate twelve months during which the High Ground Enterprise share price fell, it actually saw its earnings per share (EPS) improve by 43%. It's quite possible that growth expectations may have been unreasonable in the past. It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.
With a low yield of 1.5% we doubt that the dividend influences the share price much. High Ground Enterprise managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
This free interactive report on High Ground Enterprise's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
High Ground Enterprise shareholders are down 50% for the year (even including dividends), even worse than the market loss of 0.6%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 22% 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. You could get a better understanding of High Ground Enterprise's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like High Ground Enterprise better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.