Those Who Purchased WestStar Industrial (ASX:WSI) Shares A Year Ago Have A 52% Loss To Show For It
Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of WestStar Industrial Limited (ASX:WSI) have suffered share price declines over the last year. The share price is down a hefty 52% in that time. However, the longer term returns haven't been so bad, with the stock down 20% in the last three years. Shareholders have had an even rougher run lately, with the share price down 45% in the last 90 days. But this could be related to the weak market, which is down 23% in the same period.
See our latest analysis for WestStar Industrial
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).
During the last year WestStar Industrial grew its earnings per share, moving from a loss to a profit.
We're surprised that the share price is lower given that improvement. 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.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on WestStar Industrial's earnings, revenue and cash flow.
A Different Perspective
WestStar Industrial shareholders are down 52% for the year, falling short of the market return. The market shed around 11%, no doubt weighing on the stock price. The three-year loss of 7.2% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Take risks, for example - WestStar Industrial has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
But note: WestStar Industrial 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 AU 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.
