Fugro's (AMS:FUR) 19% YoY earnings expansion surpassed the shareholder returns over the past year

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Fugro N.V. (AMS:FUR) share price is 13% higher than it was a year ago, much better than the market return of around 9.7% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Fugro hasn't been listed for long, so it's still not clear if it is a long term winner.

Since the stock has added €65m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Fugro

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Fugro was able to grow EPS by 19% in the last twelve months. It's fair to say that the share price gain of 13% did not keep pace with the EPS growth. So it seems like the market has cooled on Fugro, despite the growth. Interesting.

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

earnings-per-share-growth

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

Fugro shareholders have gained 13% over twelve months, which isn't far from the market return of 12%. A substantial portion of that gain has come in the last three months, with the stock up 8.8% in that time. This suggests the share price maintains some momentum, and investors are taking a more positive view of the stock. It's always interesting to track share price performance over the longer term. But to understand Fugro better, we need to consider many other factors. For example, we've discovered 1 warning sign for Fugro that you should be aware of before investing here.

Fugro is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Dutch exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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