My Food Bag Group (NZSE:MFB) investors are sitting on a loss of 38% if they invested a year ago

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the My Food Bag Group Limited (NZSE:MFB) share price slid 39% over twelve months. That falls noticeably short of the market decline of around 3.1%. We wouldn't rush to judgement on My Food Bag Group because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 19% in the last three months.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for My Food Bag Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Unfortunately My Food Bag Group reported an EPS drop of 75% for the last year. The share price fall of 39% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. Indeed, with a P/E ratio of 51.86 there is obviously some real optimism that earnings will bounce back.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on My Food Bag Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt My Food Bag Group shareholders are happy with the loss of 38% over twelve months (even including dividends). That falls short of the market, which lost 3.1%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 19% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand My Food Bag Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for My Food Bag Group that you should be aware of.

My Food Bag Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.