While shareholders of Skyline Champion (NYSE:SKY) are in the black over 3 years, those who bought a week ago aren't so fortunate
It might be of some concern to shareholders to see the Skyline Champion Corporation (NYSE:SKY) share price down 11% in the last month. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. The share price marched upwards over that time, and is now 102% higher than it was. To some, the recent share price pullback wouldn't be surprising after such a good run. If the business can perform well for years to come, then the recent drop could be an opportunity.
While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
See our latest analysis for Skyline Champion
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During three years of share price growth, Skyline Champion moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that Skyline Champion has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Skyline Champion stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Skyline Champion shareholders may not have made money over the last year, but their total loss of 10% isn't as bad as the market loss of around 10%. Shareholders who have held for three years might be relatively sanguine about the recent weakness, given they have made 26% per year for three years. Given the three year returns are better than the return over the last year, it might be that the broader market has weighed on the stock recently. 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. To that end, you should be aware of the 2 warning signs we've spotted with Skyline Champion .
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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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