- Oops!Something went wrong.Please try again later.
Even the best stock pickers will make plenty of bad investments. Anyone who held Anika Therapeutics, Inc. (NASDAQ:ANIK) over the last year knows what a loser feels like. To wit the share price is down 52% in that time. Notably, shareholders had a tough run over the longer term, too, with a drop of 39% in the last three years. Even worse, it's down 12% in about a month, which isn't fun at all.
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.
Unfortunately Anika Therapeutics reported an EPS drop of 61% for the last year. This proportional reduction in earnings per share isn't far from the 52% decrease in the share price. So it seems that the market sentiment has not changed much, despite the weak results. Rather, the share price is remains a similar multiple of the EPS, suggesting the outlook remains the same.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Anika Therapeutics' earnings, revenue and cash flow.
A Different Perspective
Anika Therapeutics shareholders are down 52% for the year, but the market itself is up 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. 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 Anika Therapeutics better, we need to consider many other factors. Even so, be aware that Anika Therapeutics is showing 2 warning signs in our investment analysis , you should know about...
Of course Anika Therapeutics 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 email@example.com.