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Those Who Purchased Hut 8 Mining (TSE:HUT) Shares A Year Ago Have A 38% Loss To Show For It

Simply Wall St
·3 min read

It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Hut 8 Mining Corp. (TSE:HUT) have tasted that bitter downside in the last year, as the share price dropped 38%. That's disappointing when you consider the market returned -18%. Hut 8 Mining may have better days ahead, of course; we've only looked at a one year period. It's down 44% in about a quarter. Of course, this share price action may well have been influenced by the 21% decline in the broader market, throughout the period.

Check out our latest analysis for Hut 8 Mining

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Hut 8 Mining managed to increase earnings per share from a loss to a profit, over the last 12 months.

The result looks like a strong improvement to us, so we're surprised the market has sold down the shares. If the improved profitability is a sign of things to come, then right now may prove the perfect time to pop this stock on your watchlist.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

TSX:HUT Past and Future Earnings April 9th 2020
TSX:HUT Past and Future Earnings April 9th 2020

We know that Hut 8 Mining has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

Hut 8 Mining shareholders are down 38% for the year, even worse than the market loss of 18%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's worth noting that the last three months did the real damage, with a 44% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. 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. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Hut 8 Mining (of which 2 are a bit unpleasant!) you should know about.

But note: Hut 8 Mining may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.