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Amerant Bancorp's (NASDAQ:AMTB) Shareholders Are Down 30% On Their Shares

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Simply Wall St
·3 min read
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Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Amerant Bancorp Inc. (NASDAQ:AMTB) share price slid 30% over twelve months. That contrasts poorly with the market return of 13%. Amerant Bancorp hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. More recently, the share price has dropped a further 13% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

See our latest analysis for Amerant Bancorp

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unhappily, Amerant Bancorp had to report a 74% decline in EPS over the last year. This fall in the EPS is significantly worse than the 30% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Given that the market gained 13% in the last year, Amerant Bancorp shareholders might be miffed that they lost 30%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 1.1% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Amerant Bancorp you should be aware of.

Of course Amerant Bancorp may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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@simplywallst.com.