If You Had Bought Extraction Oil Gas (NASDAQ:XOG) Stock A Year Ago, You'd Be Sitting On A 70% Loss, Today
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The nature of investing is that you win some, and you lose some. And unfortunately for Extraction Oil & Gas, Inc. (NASDAQ:XOG) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 70%. Extraction Oil & Gas may have better days ahead, of course; we've only looked at a one year period. And the share price decline continued over the last week, dropping some 12%.
See our latest analysis for Extraction Oil & Gas
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Extraction Oil & Gas managed to increase earnings per share from a loss to a profit, over the last 12 months. Earnings per share growth rates aren't particularly useful for comparing with the share price, when a company has moved from loss to profit. So it makes sense to check out some other factors.
Extraction Oil & Gas's revenue is actually up 76% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
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.
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Extraction Oil & Gas in this interactive graph of future profit estimates.
A Different Perspective
Given that the market gained 10% in the last year, Extraction Oil & Gas shareholders might be miffed that they lost 70%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 8.4% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Extraction Oil & Gas by clicking this link.
Extraction Oil & Gas is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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 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.
