U.S. markets open in 9 hours 14 minutes
  • S&P Futures

    3,899.75
    -4.00 (-0.10%)
     
  • Dow Futures

    31,422.00
    +1.00 (+0.00%)
     
  • Nasdaq Futures

    12,023.00
    -17.50 (-0.15%)
     
  • Russell 2000 Futures

    1,769.70
    -0.10 (-0.01%)
     
  • Crude Oil

    110.87
    +1.30 (+1.19%)
     
  • Gold

    1,827.70
    +2.90 (+0.16%)
     
  • Silver

    21.19
    +0.02 (+0.10%)
     
  • EUR/USD

    1.0584
    -0.0002 (-0.02%)
     
  • 10-Yr Bond

    3.1940
    +0.0690 (+2.21%)
     
  • Vix

    26.95
    -0.28 (-1.03%)
     
  • GBP/USD

    1.2277
    +0.0006 (+0.05%)
     
  • USD/JPY

    135.2880
    -0.1580 (-0.12%)
     
  • BTC-USD

    20,717.71
    -443.78 (-2.10%)
     
  • CMC Crypto 200

    450.06
    -11.73 (-2.54%)
     
  • FTSE 100

    7,258.32
    +49.51 (+0.69%)
     
  • Nikkei 225

    26,911.08
    +39.81 (+0.15%)
     

Air Transport Services Group's (NASDAQ:ATSG) three-year earnings growth trails the 13% YoY shareholder returns

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

Thanks in no small measure to Vanguard founder Jack Bogle, it's easy buy a low cost index fund, which should provide the average market return. But you can make superior returns by picking better-than average stocks. For example, the Air Transport Services Group, Inc. (NASDAQ:ATSG) share price is up 43% in the last three years, slightly above the market return. It's nice to see the stock price has more recent momentum, too, with a rise of 27% in the last year.

Since the stock has added US$182m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Air Transport Services Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During three years of share price growth, Air Transport Services Group moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

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

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on Air Transport Services 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're pleased to report that Air Transport Services Group shareholders have received a total shareholder return of 27% over one year. That's better than the annualised return of 6% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Air Transport Services Group better, we need to consider many other factors. Even so, be aware that Air Transport Services Group is showing 3 warning signs in our investment analysis , you should know about...

Air Transport Services 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 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.