Atkore's (NYSE:ATKR) five-year earnings growth trails the 34% YoY shareholder returns
We think all investors should try to buy and hold high quality multi-year winners. While not every stock performs well, when investors win, they can win big. For example, the Atkore Inc. (NYSE:ATKR) share price is up a whopping 324% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. In the last week the share price is up 4.9%.
The past week has proven to be lucrative for Atkore investors, so let's see if fundamentals drove the company's five-year performance.
See our latest analysis for Atkore
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Over half a decade, Atkore managed to grow its earnings per share at 74% a year. The EPS growth is more impressive than the yearly share price gain of 34% over the same period. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 4.77 also suggests market apprehension.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Atkore has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Atkore's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Atkore shareholders have received a total shareholder return of 24% over the last year. Having said that, the five-year TSR of 34% a year, is even better. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Atkore has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
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