U.S. markets closed
  • S&P Futures

    4,247.50
    +1.75 (+0.04%)
     
  • Dow Futures

    34,467.00
    +5.00 (+0.01%)
     
  • Nasdaq Futures

    14,016.25
    +22.00 (+0.16%)
     
  • Russell 2000 Futures

    2,331.40
    +0.90 (+0.04%)
     
  • Crude Oil

    70.98
    +0.07 (+0.10%)
     
  • Gold

    1,869.60
    -10.00 (-0.53%)
     
  • Silver

    27.91
    -0.24 (-0.84%)
     
  • EUR/USD

    1.2104
    -0.0003 (-0.02%)
     
  • 10-Yr Bond

    1.4620
    +0.0030 (+0.21%)
     
  • Vix

    15.65
    -0.45 (-2.80%)
     
  • GBP/USD

    1.4107
    -0.0010 (-0.07%)
     
  • USD/JPY

    109.7700
    +0.1350 (+0.12%)
     
  • BTC-USD

    39,045.71
    +3,307.72 (+9.26%)
     
  • CMC Crypto 200

    976.19
    +34.37 (+3.65%)
     
  • FTSE 100

    7,134.06
    +45.88 (+0.65%)
     
  • Nikkei 225

    29,044.28
    +95.55 (+0.33%)
     

The Juniper Networks (NYSE:JNPR) Share Price Is Down 15% So Some Shareholders Are Getting Worried

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term Juniper Networks, Inc. (NYSE:JNPR) shareholders have had that experience, with the share price dropping 15% in three years, versus a market return of about 49%. The silver lining is that the stock is up 1.4% in about a week.

Check out our latest analysis for Juniper Networks

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the three years that the share price fell, Juniper Networks's earnings per share (EPS) dropped by 12% each year. This fall in the EPS is worse than the 5.2% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

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

NYSE:JNPR Past and Future Earnings, January 2nd 2020
NYSE:JNPR Past and Future Earnings, January 2nd 2020

We know that Juniper Networks has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Juniper Networks's TSR for the last 3 years was -8.6%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Juniper Networks shareholders are down 5.6% for the year (even including dividends) , but the market itself is up 32%. 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. On the bright side, long term shareholders have made money, with a gain of 4.0% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on Juniper Networks it might be wise to click here to see if insiders have been buying or selling shares.

We will like Juniper Networks better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.