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Did Daily Journal's (NASDAQ:DJCO) Share Price Deserve to Gain 19%?

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·3 min read
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It hasn't been the best quarter for Daily Journal Corporation (NASDAQ:DJCO) shareholders, since the share price has fallen 18% in that time. But at least the stock is up over the last five years. In that time, it is up 19%, which isn't bad, but is below the market return of 42%.

Check out our latest analysis for Daily Journal

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, Daily Journal became profitable. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

NasdaqCM:DJCO Past and Future Earnings April 17th 2020
NasdaqCM:DJCO Past and Future Earnings April 17th 2020

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Daily Journal's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Daily Journal shareholders have received a total shareholder return of 7.4% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3.6% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Daily Journal you should be aware of.

If you are like me, then you will 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 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.