It's nice to see the At Home Group Inc. (NYSE:HOME) share price up 28% in a week. But that hardly compensates for the shocking decline over the last twelve months. Specifically, the stock price nose-dived 82% in that time. So it's not that amazing to see a bit of a bounce. Only time will tell if the company can sustain the turnaround.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
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...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate twelve months during which the At Home Group share price fell, it actually saw its earnings per share (EPS) improve by 6.7%. It's quite possible that growth expectations may have been unreasonable in the past. It's surprising to see the share price fall so much, despite the improved EPS. So it's well worth checking out some other metrics, too.
At Home Group's revenue is actually up 22% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
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. If you are thinking of buying or selling At Home Group stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Over the last year, At Home Group shareholders took a loss of 82%. In contrast the market gained about 2.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 26% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. 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 At Home Group 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.
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