Bank of India (NSE:BANKINDIA) shareholders lost 64% as shares fell 4.6% last week
We believe smart long-term investing is the way to go. But unfortunately, some businesses just don’t succeed. Zoom on an example, the Bank of India Limited (NSE: BANKINDIA) the stock price has fallen 65% over the past half-decade. It’s not much fun for true believers. Unfortunately, the stock market dynamic is still quite negative, with prices down 8.8% in thirty days. However, we note that the price may have been affected by the overall market, which fell 5.5% over the same period.
After losing 4.6% last week, it’s worth looking at company fundamentals to see what we can infer from past performance.
Check opportunities and risks within the IN banking industry.
To paraphrase Benjamin Graham: in the short term, the market is a voting machine, but in the long term, it is a weighing machine. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
Bank of India has become profitable over the past five years. Most would consider this a good thing, so it’s counterintuitive to see the stock price go down. Other metrics can better explain the stock price movement.
The stable dividend doesn’t really explain why the stock price is down. We don’t immediately know why the stock price is down, but further research may provide some answers.
You can see how earnings and income have changed over time below (find out the exact values by clicking on the image).
It’s probably worth noting that the CEO is paid less than the median at companies of a similar size. It’s always worth keeping an eye on CEO compensation, but a more important question is whether the company will grow its profits over the years. Dive deeper into earnings by viewing this interactive graph of Bank of India earnings, revenue and cash flow.
A different perspective
We regret to report that Bank of India shareholders are down 19% for the year (even including dividends). Unfortunately, this is worse than the general market decline of 4.2%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Unfortunately, last year’s performance may point to unresolved challenges, given that it was worse than the 10% annualized loss over the past half-decade. We realize that Baron Rothschild said investors should “buy when there’s blood in the streets”, but we caution that investors must first make sure they are buying a high quality company. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Take risks, for example – Bank of India has 1 warning sign we think you should know.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven that they can increase their profits.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on IN exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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