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Wyndham Hotels & Resorts, Inc. (NYSE:WH) shareholders should be happy to see the share price up 13% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 12% in a year, falling short of the returns you could get by investing in an index fund.
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.
Wyndham Hotels & Resorts fell to a loss making position during the year. Buyers no doubt think it's a temporary situation, but those with a nose for quality have low tolerance for losses. Of course, if the company can turn the situation around, investors will likely profit.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Wyndham Hotels & Resorts' earnings, revenue and cash flow.
A Different Perspective
While Wyndham Hotels & Resorts shareholders are down 11% for the year (even including dividends), the market itself is up 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 13% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). 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 Wyndham Hotels & Resorts is showing 2 warning signs in our investment analysis , and 1 of those is concerning...
Wyndham Hotels & Resorts is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.
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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