The past three years for Calavo Growers (NASDAQ:CVGW) investors has not been profitable
The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Calavo Growers, Inc. (NASDAQ:CVGW) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 64% decline in the share price in that time. Unfortunately the share price momentum is still quite negative, with prices down 9.5% in thirty days.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
See our latest analysis for Calavo Growers
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over the three years that the share price declined, Calavo Growers' earnings per share (EPS) dropped significantly, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on Calavo Growers' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
The total return of 20% received by Calavo Growers shareholders over the last year isn't far from the market return of -21%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 9% per year over the last five years. It will probably take a substantial improvement in the fundamental performance for the company to reverse this trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Calavo Growers that you should be aware of before investing here.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
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