Investors in Procter & Gamble Hygiene and Health Care (NSE:PGHH) have unfortunately lost 18% over the last year
It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Procter & Gamble Hygiene and Health Care Limited (NSE:PGHH) share price slid 19% over twelve months. That's disappointing when you consider the market declined 0.7%. At least the damage isn't so bad if you look at the last three years, since the stock is down 11% in that time.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Even though the Procter & Gamble Hygiene and Health Care share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.
It's surprising to see the share price fall so much, despite the improved EPS. So it's well worth checking out some other metrics, too.
Given the yield is quite low, at 1.4%, we doubt the dividend can shed much light on the share price. Procter & Gamble Hygiene and Health Care 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 earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We know that Procter & Gamble Hygiene and Health Care 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 Procter & Gamble Hygiene and Health Care will earn in the future (free profit forecasts).
A Different Perspective
While the broader market lost about 0.7% in the twelve months, Procter & Gamble Hygiene and Health Care shareholders did even worse, losing 18% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Procter & Gamble Hygiene and Health Care you should be aware of.
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.