U.S. markets closed
  • S&P Futures

    4,135.50
    -12.25 (-0.30%)
     
  • Dow Futures

    33,890.00
    -72.00 (-0.21%)
     
  • Nasdaq Futures

    12,571.00
    -53.00 (-0.42%)
     
  • Russell 2000 Futures

    1,986.40
    -7.10 (-0.36%)
     
  • Crude Oil

    73.57
    +0.18 (+0.25%)
     
  • Gold

    1,876.20
    -0.40 (-0.02%)
     
  • Silver

    22.23
    -0.18 (-0.80%)
     
  • EUR/USD

    1.0789
    -0.0008 (-0.08%)
     
  • 10-Yr Bond

    3.5320
    +0.1360 (+4.00%)
     
  • Vix

    18.33
    -0.40 (-2.14%)
     
  • GBP/USD

    1.2037
    -0.0020 (-0.16%)
     
  • USD/JPY

    132.0900
    +0.9400 (+0.72%)
     
  • BTC-USD

    23,014.79
    -312.15 (-1.34%)
     
  • CMC Crypto 200

    535.42
    -1.43 (-0.27%)
     
  • FTSE 100

    7,901.80
    +81.64 (+1.04%)
     
  • Nikkei 225

    27,810.40
    +300.94 (+1.09%)
     

Investors in FONAR (NASDAQ:FONR) have unfortunately lost 23% over the last five years

FONAR Corporation (NASDAQ:FONR) shareholders should be happy to see the share price up 17% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 23% in that time, significantly under-performing the market.

It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.

See our latest analysis for FONAR

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...' 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.

Looking back five years, both FONAR's share price and EPS declined; the latter at a rate of 9.4% per year. The share price decline of 5% per year isn't as bad as the EPS decline. The relatively muted share price reaction might be because the market expects the business to turn around.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

While it's never nice to take a loss, FONAR shareholders can take comfort that their trailing twelve month loss of 2.9% wasn't as bad as the market loss of around 20%. What is more upsetting is the 4% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for FONAR you should know about.

FONAR 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 US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here