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Air Lease (NYSE:AL) shareholders are up 5.5% this past week, but still in the red over the last year

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It's understandable if you feel frustrated when a stock you own sees a lower share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. So while the Air Lease Corporation (NYSE:AL) share price is down 21% in the last year, the total return to shareholders (which includes dividends) was -20%. And that total return actually beats the market decline of 20%. Zooming out, the stock is down 20% in the last three years. The share price has dropped 26% in three months. However, one could argue that the price has been influenced by the general market, which is down 17% in the same timeframe.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Air Lease

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Air Lease fell to a loss making position during the year. Some investors no doubt dumped the stock as a result. We hope for shareholders' sake that the company becomes profitable again soon.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of Air Lease's earnings, revenue and cash flow.

A Different Perspective

Air Lease shareholders are down 20% over twelve months (even including dividends), which isn't far from the market return of -20%. So last year was actually even worse than the last five years, which cost shareholders 1.2% per year. Weak performance over the long term usually destroys market confidence in a stock, but bargain hunters may want to take a closer look for signs of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Air Lease better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Air Lease you should be aware of, and 2 of them make us uncomfortable.

Air Lease is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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