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Did You Manage To Avoid PBF Energy's (NYSE:PBF) Painful 54% Share Price Drop?

Simply Wall St

Even the best stock pickers will make plenty of bad investments. Anyone who held PBF Energy Inc. (NYSE:PBF) over the last year knows what a loser feels like. The share price is down a hefty 54% in that time. Longer term investors have fared much better, since the share price is up 1.9% in three years. Furthermore, it's down 21% in about a quarter. That's not much fun for holders. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

See our latest analysis for PBF Energy

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 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).

Unfortunately PBF Energy reported an EPS drop of 98% for the last year. This fall in the EPS is significantly worse than the 54% the share price fall. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 121.10, it's fair to say the market sees an EPS rebound on the cards.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

NYSE:PBF Past and Future Earnings, August 22nd 2019

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on PBF Energy's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered PBF Energy's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for PBF Energy shareholders, and that cash payout explains why its total shareholder loss of 52%, over the last year, isn't as bad as the share price return.

A Different Perspective

Investors in PBF Energy had a tough year, with a total loss of 52% (including dividends), against a market gain of about 2.4%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.2% 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 is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

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.

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.

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. Thank you for reading.