Imagine Owning Creative Peripherals and Distribution (NSE:CREATIVE) And Wondering If The 21% Share Price Slide Is Justified
While it may not be enough for some shareholders, we think it is good to see the Creative Peripherals and Distribution Limited (NSE:CREATIVE) share price up 17% in a single quarter. But that is minimal compensation for the share price under-performance over the last year. In fact the stock is down 21% in the last year, well below the market return.
Check out our latest analysis for Creative Peripherals and Distribution
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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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the Creative Peripherals and Distribution share price fell, it actually saw its earnings per share (EPS) improve by 50%. 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 easy to justify a look at some other metrics.
With a low yield of 0.4% we doubt that the dividend influences the share price much. Creative Peripherals and Distribution’s revenue is actually up 18% over the last year. 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 revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
This free interactive report on Creative Peripherals and Distribution’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 4.7% in the last year, Creative Peripherals and Distribution shareholders might be miffed that they lost 20% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It’s great to see a nice little 17% rebound in the last three months. Let’s just hope this isn’t the widely-feared ‘dead cat bounce’ (which would indicate further declines to come). Before deciding if you like the current share price, check how Creative Peripherals and Distribution scores on these 3 valuation metrics.
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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.
