Those Who Purchased Spark Power Group (TSE:SPG) Shares A Year Ago Have A 64% Loss To Show For It
Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Spark Power Group Inc. (TSE:SPG) have suffered share price declines over the last year. The share price is down a hefty 64% in that time. Because Spark Power Group hasn't been listed for many years, the market is still learning about how the business performs. Shareholders have had an even rougher run lately, with the share price down 41% in the last 90 days.
Check out our latest analysis for Spark Power Group
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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Even though the Spark Power Group share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth. Extraordinary items have impacted profits over the last twelve months.
It's surprising to see the share price fall so much, despite the improved EPS. So it's easy to justify a look at some other metrics.
Spark Power Group's revenue is actually up 75% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on Spark Power Group's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 4.8% in the last year, Spark Power Group shareholders might be miffed that they lost 64%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 41% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
We will like Spark Power Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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.
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. Thank you for reading.
