Can You Imagine How Neogen's (NASDAQ:NEOG) Shareholders Feel About The 67% Share Price Increase?
The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. But Neogen Corporation (NASDAQ:NEOG) has fallen short of that second goal, with a share price rise of 67% over five years, which is below the market return. Zooming in, the stock is up a respectable 10% in the last year.
View our latest analysis for Neogen
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
During five years of share price growth, Neogen achieved compound earnings per share (EPS) growth of 11% per year. This EPS growth is remarkably close to the 11% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Neogen's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Neogen shareholders gained a total return of 10% during the year. But that return falls short of the market. On the bright side, the longer term returns (running at about 11% a year, over half a decade) look better. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. 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 Neogen by clicking this link.
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.
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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