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The past year has been pretty unpleasant for shareholders of Vodafone Group (LSE: VOD), including my family. The Vodafone share price has pretty much been in freefall since late February, losing more than a quarter of its value in five months.
Vodafone’s share price slumps
At their 52-week high, Vodafone shares peaked at 129.34p on 25 July 2022 — exactly a year ago. Since then, it’s been a torrid tale of trips and tumbles as the share price kept sliding.
Here’s how this popular and widely held FTSE 100 stock has performed over seven different timescales, based on the current share price of 75.78p:
| One day | -1.0% |
| Five days | +4.7% |
| One month | +8.2% |
| Year to date | -10.2% |
| Six months | -17.9% |
| One year | -41.3% |
| Five years | -57.9% |
Although Vodafone stock has staged something of a comeback over the last fortnight, its longer-term direction has been steeply downwards. Indeed, the shares have crashed by two-fifths in the past 12 months, while losing close to three-fifths of their value in half a decade.
For the record, my wife bought Vodafone shares for our family portfolio in early December last year. She paid an all-in price of 90.2p per share, so we’re sitting on a paper loss of 16% today. Oops.
Is this tanker set to turn?
The good news for Vodafone’s long-suffering owners is that its share price has recently taken a turn for the better. At its 52-week low, it plunged to 69.73p on 11 July. Two weeks later, the stock has bounced by 8.7% from this bottom.
The latest price bump came on Monday, 24 July, when the telecoms giant released its latest trading update. At long last, this announcement contained good news, with Vodafone reporting decent organic/adjusted growth within its sprawling global operations.
Overall, total revenue in the first quarter was up 4.8% year on year, with adjusted growth coming in at 3.7%. The star performer was the UK market, which recorded growth of 5.7% following inflation-plus price rises this spring. Also, revenue declined at slower rates in Germany, Italy and Spain.
Of course, as the old saying goes, one swallow does not a summer make. Even so, it’s good to see Vodafone reporting positive, broad-based results under its new CEO Margherita Della Valle. Also, her former role as CFO will be filled by Luka Mucic from 1 September.
Would I buy Vodafone today?
If things really are on the turn for the telecoms firm, then its shares appear undervalued to me today. They trade on a modest multiple of 7.7 times earnings, for an earnings yield of 12.9%. However, the bumper dividend yield of 10.5% a year is covered only 1.2 times by earnings, leaving little room for error.
We won’t be adding to our Vodafone holding any time soon. First, because we already own this battered stock. Second, because I don’t have any spare cash to invest right now. Nevertheless, I’m hopeful that after five years of pain, the next five years could be better for Vodafone shareholders!
