Chart Industries (NYSE:GTLS) advances 9.9% this week, taking five-year gains to 100%
It hasn't been the best quarter for Chart Industries, Inc. (NYSE:GTLS) shareholders, since the share price has fallen 24% in that time. But that doesn't change the fact that the returns over the last five years have been very strong. Indeed, the share price is up an impressive 100% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Ultimately business performance will determine whether the stock price continues the positive long term trend.
Since the stock has added US$474m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
View our latest analysis for Chart Industries
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).
Chart Industries' earnings per share are down 1.9% per year, despite strong share price performance over five years. This was, in part, due to extraordinary items impacting earning in the last twelve months.
So it's hard to argue that the earnings per share are the best metric to judge the company, as it may not be optimized for profits at this point. Therefore, it's worth taking a look at other metrics to try to understand the share price movements.
In contrast revenue growth of 16% per year is probably viewed as evidence that Chart Industries is growing, a real positive. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Chart Industries stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While the broader market gained around 14% in the last year, Chart Industries shareholders lost 2.7%. 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. Longer term investors wouldn't be so upset, since they would have made 15%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Chart Industries better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Chart Industries (including 1 which makes us a bit uncomfortable) .
Chart Industries is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.
