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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 IFGL Refractories Limited (NSE:IFGLEXPOR) have tasted that bitter downside in the last year, as the share price dropped 10%. That's well bellow the market return of 0.9%. We wouldn't rush to judgement on IFGL Refractories because we don't have a long term history to look at.
Check out our latest analysis for IFGL Refractories
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the unfortunate twelve months during which the IFGL Refractories share price fell, it actually saw its earnings per share (EPS) improve by 54%. 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 well worth checking out some other metrics, too.
Given the yield is quite low, at 0.9%, we doubt the dividend can shed much light on the share price. IFGL Refractories 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.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
We know that IFGL Refractories has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think IFGL Refractories will earn in the future (free profit forecasts)
A Different Perspective
Given that the market gained 0.9% in the last year, IFGL Refractories shareholders might be miffed that they lost 9.5% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 6.5% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Before forming an opinion on IFGL Refractories you might want to consider these 3 valuation metrics.
But note: IFGL Refractories may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).