SeaWorld Entertainment (NYSE:SEAS) jumps 6.0% this week, though earnings growth is still tracking behind three-year shareholder returns
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the SeaWorld Entertainment, Inc. (NYSE:SEAS) share price has soared 267% in the last three years. How nice for those who held the stock! Better yet, the share price has risen 6.0% in the last week. But this could be related to the buoyant market which is up about 3.1% in a week.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
See our latest analysis for SeaWorld Entertainment
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.
SeaWorld Entertainment was able to grow its EPS at 71% per year over three years, sending the share price higher. The average annual share price increase of 54% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
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. Dive deeper into the earnings by checking this interactive graph of SeaWorld Entertainment's earnings, revenue and cash flow.
A Different Perspective
It's good to see that SeaWorld Entertainment has rewarded shareholders with a total shareholder return of 25% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 21% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand SeaWorld Entertainment better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with SeaWorld Entertainment .
There are plenty of other companies that have insiders buying up shares. You probably do 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 American 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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