If You Had Bought Genworth Mortgage Insurance Australia (ASX:GMA) Shares A Year Ago You'd Have Earned 34% Returns
On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Over the last year the Genworth Mortgage Insurance Australia Limited (ASX:GMA) share price is up 34%, but that's less than the broader market return. However, the stock hasn't done so well in the longer term, with the stock only up 16% in three years.
View our latest analysis for Genworth Mortgage Insurance Australia
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the last year Genworth Mortgage Insurance Australia grew its earnings per share, moving from a loss to a profit.
While it's good to see positive EPS of AU$0.052 this year, the loss wasn't too bad last year. But judging by the share price, the market is happy with the maiden profit. Inflection points like this can be a great time to take a closer look at a company.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Genworth Mortgage Insurance Australia's earnings, revenue and cash flow.
A Different Perspective
Genworth Mortgage Insurance Australia shareholders gained a total return of 34% during the year. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 11% per year over five year. It is possible that returns will improve along with the business fundamentals. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Genworth Mortgage Insurance Australia 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 AU 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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