U.S. markets open in 6 hours 14 minutes
  • S&P Futures

    3,812.00
    -27.00 (-0.70%)
     
  • Dow Futures

    31,393.00
    -72.00 (-0.23%)
     
  • Nasdaq Futures

    12,437.00
    -226.75 (-1.79%)
     
  • Russell 2000 Futures

    2,175.10
    -14.60 (-0.67%)
     
  • Crude Oil

    66.87
    +0.78 (+1.18%)
     
  • Gold

    1,696.00
    -2.50 (-0.15%)
     
  • Silver

    25.44
    +0.15 (+0.61%)
     
  • EUR/USD

    1.1895
    -0.0030 (-0.25%)
     
  • 10-Yr Bond

    1.5540
    0.0000 (0.00%)
     
  • Vix

    24.66
    -3.91 (-13.69%)
     
  • GBP/USD

    1.3839
    +0.0011 (+0.08%)
     
  • USD/JPY

    108.4080
    +0.0260 (+0.02%)
     
  • BTC-USD

    49,749.52
    +309.44 (+0.63%)
     
  • CMC Crypto 200

    1,004.94
    +61.77 (+6.55%)
     
  • FTSE 100

    6,682.01
    +51.49 (+0.78%)
     
  • Nikkei 225

    28,743.25
    -121.07 (-0.42%)
     

If You Had Bought Old National Bancorp's (NASDAQ:ONB) Shares Three Years Ago You Would Be Down 19%

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

Old National Bancorp (NASDAQ:ONB) shareholders should be happy to see the share price up 19% in the last month. But that doesn't help the fact that the three year return is less impressive. After all, the share price is down 19% in the last three years, significantly under-performing the market.

See our latest analysis for Old National Bancorp

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the unfortunate three years of share price decline, Old National Bancorp actually saw its earnings per share (EPS) improve by 3.4% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Alternatively, growth expectations may have been unreasonable in the past.

It's pretty reasonable to suspect the market was previously to bullish on the stock, and has since moderated expectations. Looking to other metrics might better explain the share price change.

We note that, in three years, revenue has actually grown at a 9.2% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating Old National Bancorp further; while we may be missing something on this analysis, there might also be an opportunity.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Old National Bancorp stock, you should check out this free report showing analyst profit forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Old National Bancorp the TSR over the last 3 years was -11%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the broader market gained around 21% in the last year, Old National Bancorp shareholders lost 16% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Old National Bancorp better, we need to consider many other factors. For example, we've discovered 1 warning sign for Old National Bancorp that you should be aware of before investing here.

Old National Bancorp 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.

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.

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