U.S. Markets close in 2 hrs 19 mins
  • S&P 500

    4,438.45
    -35.30 (-0.79%)
     
  • Dow 30

    34,584.67
    -166.65 (-0.48%)
     
  • Nasdaq

    15,040.04
    -141.89 (-0.93%)
     
  • Russell 2000

    2,230.31
    -2.60 (-0.12%)
     
  • Crude Oil

    71.81
    -0.80 (-1.10%)
     
  • Gold

    1,752.00
    -4.70 (-0.27%)
     
  • Silver

    22.42
    -0.33 (-1.44%)
     
  • EUR/USD

    1.1734
    -0.0037 (-0.3168%)
     
  • 10-Yr Bond

    1.3700
    +0.0390 (+2.93%)
     
  • Vix

    20.75
    +2.06 (+11.02%)
     
  • GBP/USD

    1.3754
    -0.0042 (-0.3067%)
     
  • USD/JPY

    109.9500
    +0.2320 (+0.2114%)
     
  • BTC-USD

    47,555.07
    -177.11 (-0.37%)
     
  • CMC Crypto 200

    1,206.59
    -18.95 (-1.55%)
     
  • FTSE 100

    6,963.64
    -63.84 (-0.91%)
     
  • Nikkei 225

    30,500.05
    +176.71 (+0.58%)
     

1st Source (NASDAQ:SRCE) Shareholders Have Enjoyed A 54% Share Price Gain

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market But 1st Source Corporation (NASDAQ:SRCE) has fallen short of that second goal, with a share price rise of 54% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 32% share price gain over twelve months.

Check out our latest analysis for 1st Source

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, 1st Source managed to grow its earnings per share at 11% a year. This EPS growth is reasonably close to the 9% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Indeed, it would appear the share price is reacting to the EPS.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

We like that insiders have been buying shares in the last twelve months. 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 1st Source's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, 1st Source's TSR for the last 5 years was 72%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

1st Source provided a TSR of 36% over the last twelve months. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 11% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for 1st Source (1 can't be ignored!) that you should be aware of before investing here.

1st Source 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 US exchanges.

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. 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.

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