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Clean Harbors (NYSE:CLH) Shareholders Booked A 68% Gain In The Last Five Years

Simply Wall St

When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, the Clean Harbors, Inc. (NYSE:CLH) share price is up 68% in the last 5 years, clearly besting the market return of around 52% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 42% in the last year.

See our latest analysis for Clean Harbors

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.

During the last half decade, Clean Harbors became profitable. That would generally be considered a positive, so we'd expect the share price to be up.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

NYSE:CLH Past and Future Earnings, February 4th 2020
NYSE:CLH Past and Future Earnings, February 4th 2020

It is of course excellent to see how Clean Harbors has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that Clean Harbors shareholders have received a total shareholder return of 42% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Be aware that Clean Harbors is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

Of course Clean Harbors 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.