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Can You Imagine How Amkor Technology's (NASDAQ:AMKR) Shareholders Feel About The 58% Share Price Increase?

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One simple way to benefit from the stock market is to buy an index fund. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. Just take a look at Amkor Technology, Inc. (NASDAQ:AMKR), which is up 58%, over three years, soundly beating the market return of 41% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 10% in the last year.

Check out our latest analysis for Amkor Technology

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).

Amkor Technology was able to grow its EPS at 35% per year over three years, sending the share price higher. The average annual share price increase of 16% is actually lower than the EPS growth. So it seems investors have become more cautious about the company, over time.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

NasdaqGS:AMKR Past and Future Earnings, April 30th 2019
NasdaqGS:AMKR Past and Future Earnings, April 30th 2019

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. Dive deeper into the earnings by checking this interactive graph of Amkor Technology's earnings, revenue and cash flow.

A Different Perspective

Amkor Technology shareholders gained a total return of 10% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 1.2% over half a decade This suggests the company might be improving over time. 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.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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.

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