Investors in Delta Air Lines (NYSE:DAL) have seen returns of 20% over the past year
We believe investing is smart because history shows that stock markets go higher in the long term. But not every stock you buy will perform as well as the overall market. Over the last year the Delta Air Lines, Inc. (NYSE:DAL) share price is up 20%, but that's less than the broader market return. Zooming out, the stock is actually down 16% in the last three years.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for Delta Air Lines
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 last year Delta Air Lines grew its earnings per share (EPS) by 249%. This EPS growth is significantly higher than the 20% increase in the share price. Therefore, it seems the market isn't as excited about Delta Air Lines as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.92.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Delta Air Lines' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Delta Air Lines shareholders gained a total return of 20% during the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 2% per year, over five years. It could well be that the business is stabilizing. 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. For example, we've discovered 2 warning signs for Delta Air Lines (1 is a bit concerning!) that you should be aware of before investing here.
Delta Air Lines is not the only stock that insiders are buying. 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 American 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.
