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Investors Who Bought Atkore International Group (NYSE:ATKR) Shares Three Years Ago Are Now Up 37%

Simply Wall St

It might be of some concern to shareholders to see the Atkore International Group Inc. (NYSE:ATKR) share price down 19% in the last month. In contrast the stock is up over the last three years. Arguably you'd have been better off buying an index fund, because the gain of 37% in three years isn't amazing.

View our latest analysis for Atkore International Group

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 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.

Atkore International Group was able to grow its EPS at 33% per year over three years, sending the share price higher. The average annual share price increase of 11% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock. We'd venture the lowish P/E ratio of 8.42 also reflects the negative sentiment around the stock.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

We know that Atkore International Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Atkore International Group's financial health with this free report on its balance sheet.

A Different Perspective

Over the last year, Atkore International Group shareholders took a loss of 19%. In contrast the market gained about 16%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Investors are up over three years, booking 11% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. 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. Take risks, for example - Atkore International Group has 3 warning signs we think you should be aware of.

But note: Atkore International Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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@simplywallst.com.