One simple way to benefit from the stock market is to buy an index fund. But many of us dare to dream of bigger returns, and build a portfolio ourselves. Just take a look at Radware Ltd. (NASDAQ:RDWR), which is up 73%, over three years, soundly beating the market return of 35% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 4.6% in the last year.
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 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.
Radware became profitable within the last three years. That would generally be considered a positive, so we'd expect the share price to be up.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Radware has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Radware's financial health with this free report on its balance sheet.
A Different Perspective
Radware shareholders gained a total return of 4.6% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 2.1% per year over five year. This suggests the company might be improving over time. Before spending more time on Radware it might be wise to click here to see if insiders have been buying or selling shares.
We will like Radware 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.