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Can You Imagine How Jubilant P.A.M. Transportation Services' (NASDAQ:PTSI) Shareholders Feel About Its 132% Share Price Gain?

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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) which saw its share price drive 132% higher over five years. On top of that, the share price is up 22% in about a quarter.

View our latest analysis for P.A.M. Transportation Services

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 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.

Over half a decade, P.A.M. Transportation Services managed to grow its earnings per share at 1.1% a year. This EPS growth is slower than the share price growth of 18% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
earnings-per-share-growth

This free interactive report on P.A.M. Transportation Services' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

P.A.M. Transportation Services shareholders gained a total return of 54% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 18% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - P.A.M. Transportation Services has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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 (at) simplywallst.com.