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We believe investing is smart because history shows that stock markets go higher in the long term. But not every stock you buy will perform as well as the overall market. For example, the Columbia Financial, Inc. (NASDAQ:CLBK), share price is up over the last year, but its gain of 34% trails the market return. Having said that, the longer term returns aren't so impressive, with stock gaining just 6.9% in three years.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Columbia Financial was able to grow EPS by 56% in the last twelve months. It's fair to say that the share price gain of 34% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Columbia Financial as it was before. This could be an opportunity.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Columbia Financial's earnings, revenue and cash flow.
A Different Perspective
Columbia Financial produced a TSR of 34% over the last year. While you don't go broke making a profit, this return was actually lower than the average market return of about 41%. On the other hand, the TSR over three years was worse, at just 2.2% per year. This suggests the company's position is improving. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. It's always interesting to track share price performance over the longer term. But to understand Columbia Financial better, we need to consider many other factors. Even so, be aware that Columbia Financial is showing 1 warning sign in our investment analysis , you should know about...
Columbia Financial 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 US exchanges.
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. 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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