Investors in Enerpac Tool Group (NYSE:EPAC) have seen returns of 27% over the past year
The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Enerpac Tool Group Corp. (NYSE:EPAC) share price is up 27% in the last 1 year, clearly besting the market return of around 4.8% (not including dividends). So that should have shareholders smiling. Longer term, the stock is up 25% in 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.
View our latest analysis for Enerpac Tool Group
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Enerpac Tool Group was able to grow EPS by 171% in the last twelve months. This EPS growth is significantly higher than the 27% increase in the share price. Therefore, it seems the market isn't as excited about Enerpac Tool Group as it was before. This could be an opportunity.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
A Different Perspective
It's nice to see that Enerpac Tool Group shareholders have received a total shareholder return of 27% over the last year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 0.8% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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 instance, we've identified 1 warning sign for Enerpac Tool Group that you should be aware of.
But note: Enerpac Tool 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 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.
