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It is a pleasure to report that the Universal Electronics Inc. (NASDAQ:UEIC) is up 38% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 40% in the last three years, significantly under-performing the market.
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 five years of share price growth, Universal Electronics moved from a loss to profitability. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.
We note that, in three years, revenue has actually grown at a 4.0% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching Universal Electronics more closely, as sometimes stocks fall unfairly. This could present an opportunity.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We know that Universal Electronics has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Universal Electronics will earn in the future (free profit forecasts).
A Different Perspective
We're pleased to report that Universal Electronics shareholders have received a total shareholder return of 34% over one year. There's no doubt those recent returns are much better than the TSR loss of 0.7% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. If you would like to research Universal Electronics in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like Universal Electronics better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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 email@example.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.