Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. Investors are up over three years, booking 4% per year, much better than the more recent returns. The market shed around 14%, no doubt weighing on the stock price. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.ĭropbox shareholders are down 28% for the year, falling short of the market return. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.
While the last year has been tough for Dropbox shareholders, this past week has shown signs of promise. We do note, however, that the broader market is down 5.2% in that period, and this may have weighed on the share price. Unfortunately the share price momentum is still quite negative, with prices down 8.4% in thirty days. The silver lining (for longer term investors) is that the stock is still 13% higher than it was three years ago.
That falls noticeably short of the market decline of around 14%. ( NASDAQ:DBX) share price slid 28% over twelve months. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. The simplest way to benefit from a rising market is to buy an index fund.
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