Investing in Prestige Consumer Healthcare (NYSE:PBH) three years ago would have delivered you a 106% gain
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For instance the Prestige Consumer Healthcare Inc. (NYSE:PBH) share price is 106% higher than it was three years ago. How nice for those who held the stock! It's also good to see the share price up 12% over the last quarter. But this could be related to the strong market, which is up 6.0% in the last three months.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Prestige Consumer Healthcare
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the three years of share price growth, Prestige Consumer Healthcare actually saw its earnings per share (EPS) drop 18% per year.
So we doubt that the market is looking to EPS for its main judge of the company's value. Therefore, we think it's worth considering other metrics as well.
The revenue drop of 0.3% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Prestige Consumer Healthcare's share price and its historic fundamental data. Further research may be required!
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that Prestige Consumer Healthcare has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Prestige Consumer Healthcare stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's good to see that Prestige Consumer Healthcare has rewarded shareholders with a total shareholder return of 79% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Prestige Consumer Healthcare you should know about.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
