Generally speaking, long-term investing is the way to go. But that doesn’t mean long-term investors can avoid big losses. in short, L&T Finance Holdings Limited (NSE:L&TFH) shares have fallen 63% over five years. This is an unpleasant experience for long-term holders. The stock fell another 9.8% last week.

It’s been a tough week for shareholders, so let’s explore the fundamentals and see what we can learn.

however, Opportunities and risks lie within the L&TFH industrywhere you can check our analysis on the IN diversified financial industry.

The efficient market hypothesis continues to be taught by some, but it has been proven that markets are overly reactive dynamic systems and investors are not always rational. One flawed but plausible way to assess how a company’s sentiment has changed is to compare its earnings per share (EPS) to its stock price.

Over the five years of stock price decline, L&T Finance Holdings’ earnings per share (EPS) has fallen 7.3% each year. This EPS decline is less than the stock’s 18% annual decline. This means the market has become more cautious about business these days.

The image below shows how the EPS tracked over time (click image for more details).

Earnings per share growth
NSEI: L&TFH Earnings Per Share Growth Sep 27, 2022

It’s always a good idea to study the historical growth trends before buying or selling stocks.


In addition to measuring price-to-earnings ratio, investors should also consider total shareholder return (TSR). The TSR includes the value of dividends (assuming they have been reinvested) and discounted capital raising or spin-off earnings, while the stock return reflects only changes in the stock price. It’s no exaggeration to say that the TSR provides a more complete picture of dividend-paying stocks. As it happens, L&T Finance Holdings has a TSR of -58% over the past five years, beating the stock return mentioned above. This is primarily a result of dividend payments!

another point of view

Investors in L&T Finance Holdings had a tough year, posting a 16% loss (including dividends) against a market gain of around 2.2%. Even blue chip stock prices can fall, but we want to see improvements in basic business metrics before we get too interested. However, last year’s losses are not as severe as the 10% annual losses that investors have suffered over the past five years. Before building enthusiasm, you need to see continuous improvement in your key metrics. I find it very interesting to look at stock prices over the long term as an indicator of performance. But for true insight, other information must also be considered.Case in point: we found Two warning signs for L&T Finance Holdings You should know, and one of them doesn’t sit well with us.

of course L&T Finance Holdings may not be the best stock to buySo you might want to watch this freedom Collection of growing strains.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the IN exchange.

This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or qualitative materials. Is not …

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