Ampco-Pittsburgh (NYSE:AP) investors are sitting on a loss of 63% if they invested three years ago
Investing in stocks inevitably means buying into some companies that perform poorly. But the long term shareholders of Ampco-Pittsburgh Corporation (NYSE:AP) have had an unfortunate run in the last three years. Sadly for them, the share price is down 63% in that time. And over the last year the share price fell 22%, so we doubt many shareholders are delighted.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for Ampco-Pittsburgh
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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).
During the three years that the share price fell, Ampco-Pittsburgh's earnings per share (EPS) dropped by 53% each year. In comparison the 28% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
Investors in Ampco-Pittsburgh had a tough year, with a total loss of 22%, against a market gain of about 20%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Ampco-Pittsburgh better, we need to consider many other factors. Take risks, for example - Ampco-Pittsburgh has 4 warning signs (and 2 which are potentially serious) we think you should know about.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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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.
