U.S. markets open in 5 hours 23 minutes
  • S&P Futures

    4,292.25
    -6.00 (-0.14%)
     
  • Dow Futures

    33,869.00
    -4.00 (-0.01%)
     
  • Nasdaq Futures

    13,653.25
    -28.00 (-0.20%)
     
  • Russell 2000 Futures

    2,022.30
    -1.50 (-0.07%)
     
  • Crude Oil

    88.70
    -0.71 (-0.79%)
     
  • Gold

    1,792.50
    -5.60 (-0.31%)
     
  • Silver

    20.13
    -0.14 (-0.70%)
     
  • EUR/USD

    1.0158
    -0.0006 (-0.06%)
     
  • 10-Yr Bond

    2.7910
    0.0000 (0.00%)
     
  • Vix

    20.08
    +0.55 (+2.82%)
     
  • GBP/USD

    1.2051
    -0.0007 (-0.06%)
     
  • USD/JPY

    133.7120
    +0.4400 (+0.33%)
     
  • BTC-USD

    24,035.28
    -3.97 (-0.02%)
     
  • CMC Crypto 200

    570.05
    -20.72 (-3.51%)
     
  • FTSE 100

    7,538.86
    +29.71 (+0.40%)
     
  • Nikkei 225

    28,868.91
    -2.87 (-0.01%)
     

Investors in James Fisher and Sons (LON:FSJ) have unfortunately lost 76% over the last three years

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

It's not possible to invest over long periods without making some bad investments. But really big losses can really drag down an overall portfolio. So consider, for a moment, the misfortune of James Fisher and Sons plc (LON:FSJ) investors who have held the stock for three years as it declined a whopping 77%. That would certainly shake our confidence in the decision to own the stock. And more recent buyers are having a tough time too, with a drop of 63% in the last year.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for James Fisher and Sons

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...' 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.

Over the three years that the share price declined, James Fisher and Sons' earnings per share (EPS) dropped significantly, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

James Fisher and Sons shareholders are down 63% for the year, but the market itself is up 11%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with James Fisher and Sons (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

James Fisher and Sons 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 GB 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.