U.S. markets closed
  • S&P Futures

    3,292.75
    +29.25 (+0.90%)
     
  • Dow Futures

    26,649.00
    +240.00 (+0.91%)
     
  • Nasdaq Futures

    11,234.25
    +101.50 (+0.91%)
     
  • Russell 2000 Futures

    1,550.40
    +11.20 (+0.73%)
     
  • Crude Oil

    37.39
    0.00 (0.00%)
     
  • Gold

    1,879.20
    0.00 (0.00%)
     
  • Silver

    23.42
    +0.06 (+0.26%)
     
  • EUR/USD

    1.1751
    +0.0001 (+0.01%)
     
  • 10-Yr Bond

    0.7810
    +0.0030 (+0.39%)
     
  • Vix

    40.28
    +6.93 (+20.78%)
     
  • GBP/USD

    1.2994
    +0.0006 (+0.05%)
     
  • USD/JPY

    104.4960
    +0.1950 (+0.19%)
     
  • BTC-USD

    13,183.12
    -34.17 (-0.26%)
     
  • CMC Crypto 200

    260.97
    -11.72 (-4.30%)
     
  • FTSE 100

    5,582.80
    -146.19 (-2.55%)
     
  • Nikkei 225

    23,261.98
    -156.53 (-0.67%)
     

What Type Of Returns Would Fox's(NASDAQ:FOXA) Shareholders Have Earned If They Purchased Their SharesYear Ago?

Simply Wall St
·3 mins read

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Fox Corporation (NASDAQ:FOXA) share price slid 15% over twelve months. That's well below the market return of 16%. Because Fox hasn't been listed for many years, the market is still learning about how the business performs. Unhappily, the share price slid 4.5% in the last week.

See our latest analysis for Fox

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Unfortunately Fox reported an EPS drop of 37% for the last year. This fall in the EPS is significantly worse than the 15% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of Fox's earnings, revenue and cash flow.

A Different Perspective

While Fox shareholders are down 14% for the year (even including dividends), the market itself is up 16%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 0.7% 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. 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. For example, we've discovered 4 warning signs for Fox that you should be aware of before investing here.

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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.