While shareholders of Penumbra (NYSE:PEN) are in the black over 1 year, those who bought a week ago aren't so fortunate
Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Penumbra, Inc. (NYSE:PEN). Its share price is already up an impressive 143% in the last twelve months. It's also good to see the share price up 19% over the last quarter. Looking back further, the stock price is 71% higher than it was three years ago.
In light of the stock dropping 4.9% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.
See our latest analysis for Penumbra
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. 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.
During the last year Penumbra grew its earnings per share, moving from a loss to a profit.
While it's good to see positive EPS of US$0.17 this year, the loss wasn't too bad last year. But from the looks of the share price gain, the market is certainly pleased the company is now profitable. Some investors scan for companies that have just become profitable, since that's an important business development milestone.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Penumbra's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that Penumbra shareholders have received a total shareholder return of 143% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 19% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Penumbra 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 American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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