The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by HPL Electric & Power Limited (NSE:HPL) shareholders over the last year, as the share price declined 47%. That's disappointing when you consider the market returned -1.0%. HPL Electric & Power hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 8.1%.

Check out our latest analysis for HPL Electric & Power

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Unhappily, HPL Electric & Power had to report a 9.7% decline in EPS over the last year. This reduction in EPS is not as bad as the 47% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into HPL Electric & Power's key metrics by checking this interactive graph of HPL Electric & Power's earnings, revenue and cash flow.

A Different Perspective

We doubt HPL Electric & Power shareholders are happy with the loss of 47% over twelve months (even including dividends). That falls short of the market, which lost 1.0%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Putting aside the last twelve months, it's good to see the share price has rebounded by 6.3%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. Is HPL Electric & Power cheap compared to other companies? These 3 valuation measures might help you decide.

For those who like to find winning investments this free list of growing 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 IN exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.