Orpea (EPA:ORP) profits fell during the year, contributing to a 63% loss for shareholders

Taking the occasional loss is an integral part of investing in the stock market. And unfortunately for Orpea S.A. (EPA:ORP), stocks are much weaker today than they were a year ago. The stock price fell 63% during this period. We can see that it hasn’t been easy either for shareholders over the past three years; the stock price fell 62% during this period. The falls have accelerated recently, with the stock price falling 56% in the past three months.

The recent 5.0% rise could be a positive sign of things to come, so let’s look a lot at historical fundamentals.

Check out our latest analysis for Orpea

To quote Buffett, “Ships will circumnavigate the globe, but the Flat Earth Society will prosper. There will continue to be wide gaps between price and value in the market…’ An imperfect but reasonable way to gauge how sentiment around a company has changed is to compare earnings per share (EPS) with the stock price.

Unfortunately, Orpea had to report EPS down 1.5% over the past year. The 63% share price decline is actually greater than the EPS decline. So it seems the market was overconfident about the company a year ago.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

ENXTPA: Growth in earnings per share ORP February 23, 2022

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. This free Orpea’s interactive earnings, revenue and cash flow report is a great place to start if you want to dive deeper into the stock analysis.

A different perspective

Orpea investors had a difficult year, with a total loss of 63% (including dividends), against a market gain of around 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance capped a bad run, with shareholders facing a total loss of 9% per year over five years. 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. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 4 warning signs for Orpea (1 should not be ignored!) which you should be aware of before investing here.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on UK exchanges.

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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