U.S. Markets open in 2 hrs 21 mins
  • S&P Futures

    3,420.50
    -31.25 (-0.91%)
     
  • Dow Futures

    27,934.00
    -255.00 (-0.90%)
     
  • Nasdaq Futures

    11,570.00
    -93.50 (-0.80%)
     
  • Russell 2000 Futures

    1,615.30
    -20.30 (-1.24%)
     
  • Crude Oil

    39.12
    -0.73 (-1.83%)
     
  • Gold

    1,906.40
    +1.20 (+0.06%)
     
  • Silver

    24.40
    -0.27 (-1.11%)
     
  • EUR/USD

    1.1829
    -0.0039 (-0.3312%)
     
  • 10-Yr Bond

    0.8410
    0.0000 (0.00%)
     
  • Vix

    29.81
    +1.70 (+6.05%)
     
  • GBP/USD

    1.3067
    +0.0028 (+0.2182%)
     
  • USD/JPY

    104.8500
    +0.1600 (+0.1528%)
     
  • BTC-USD

    13,130.87
    +53.86 (+0.41%)
     
  • CMC Crypto 200

    263.30
    +1.84 (+0.70%)
     
  • FTSE 100

    5,839.13
    -21.15 (-0.36%)
     
  • Nikkei 225

    23,494.34
    -22.25 (-0.09%)
     

Luxfer Holdings'(NYSE:LXFR) Share Price Is Down 20% Over The Past Year.

Simply Wall St
·3 mins read

It's easy to match the overall market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Luxfer Holdings PLC (NYSE:LXFR) shareholders over the last year, as the share price declined 20%. That's well below the market return of 15%. Luxfer Holdings may have better days ahead, of course; we've only looked at a one year period. Even worse, it's down 9.6% in about a month, which isn't fun at all.

View our latest analysis for Luxfer Holdings

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.

Luxfer Holdings managed to increase earnings per share from a loss to a profit, over the last 12 months.

The company was close to break-even last year, so earnings per share of US$0.50 strike us as less than amazing. Taking a look at the share price, it seems that investors were expecting better from the company. Sentiment seems negative, despite the newfound profitability - so contrarians may want to take a look at the stock.

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 know that Luxfer Holdings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Luxfer Holdings will grow revenue in the future.

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 is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Luxfer Holdings' TSR for the last year was -17%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

While Luxfer Holdings shareholders are down 17% for the year (even including dividends), the market itself is up 15%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 5.8%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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 3 warning signs for Luxfer Holdings that you should be aware of.

Of course Luxfer Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

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