Investors in Jain Irrigation Systems (NSE: JISLDVREQS) are sitting on a 70% loss if they had invested five years ago

Statistically speaking, long-term investing is a profitable business. But no one is safe from buying too much. Namely, the Jain Irrigation Systems Limited (NSE: JISLDVREQS) the stock price has managed to drop 71% over five long years. It’s an unpleasant experience for long-term holders.

Given that shareholders are down longer term, let’s take a look at the underlying fundamentals over this period and see if they have been consistent with returns.

See our latest review for Jain Irrigation Systems

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

In five years of share price growth, Jain Irrigation Systems has gone from loss to profitability. This would generally be seen as a positive, so we’re surprised to see the stock price down. Other metrics might give us a better idea of ​​how its value is changing over time.

Arguably, the revenue decline of 4.6% per year for half a decade suggests that the company cannot grow in the long term. This probably encouraged some shareholders to sell the stock.

The graph below illustrates the evolution of income and income over time (reveal the exact values ​​by clicking on the image).

NSEI: JISLDVREQS Earnings and Revenue Growth July 25, 2022

Take a closer look at the financial health of Jain Irrigation Systems with this free report on its balance sheet.

A different perspective

Investors in Jain Irrigation Systems had a difficult year, with a total loss of 3.6%, against a market gain of around 6.6%. Even good stock prices sometimes drop, but we want to see improvements in a company’s fundamentals before we get too interested. Unfortunately, longer-term shareholders are suffering more, given the 11% loss distributed over the past five years. We would need to see sustained improvements in key metrics before we could muster much enthusiasm. It is always interesting to follow the evolution of the share price over the long term. But to better understand Jain Irrigation Systems, we need to consider many other factors. Even so, know that Jain Irrigation Systems shows 4 warning signs in our investment analysis and 2 of them are significant…

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 IN 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.