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Spirit of Texas Bancshares, Inc. (NASDAQ:STXB) shareholders should be happy to see the share price up 20% in the last month. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 31% in one year, under-performing the market.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 unfortunate twelve months during which the Spirit of Texas Bancshares share price fell, it actually saw its earnings per share (EPS) improve by 6.1%. It's quite possible that growth expectations may have been unreasonable in the past.
It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's easy to justify a look at some other metrics.
Given the yield is quite low, at 1.8%, we doubt the dividend can shed much light on the share price. Spirit of Texas Bancshares' revenue is actually up 33% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think Spirit of Texas Bancshares will earn in the future (free profit forecasts).
A Different Perspective
Given that the market gained 20% in the last year, Spirit of Texas Bancshares shareholders might be miffed that they lost 30% (even including dividends). While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Putting aside the last twelve months, it's good to see the share price has rebounded by 18%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. Even so, be aware that Spirit of Texas Bancshares is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...
Spirit of Texas Bancshares 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.
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. 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.
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