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The main point of investing for the long term is to make money. Better yet, you'd like to see the share price move up more than the market average. But White Mountains Insurance Group, Ltd. (NYSE:WTM) has fallen short of that second goal, with a share price rise of 38% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 29% over the last year.
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 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 the five years of share price growth, White Mountains Insurance Group moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into White Mountains Insurance Group's key metrics by checking this interactive graph of White Mountains Insurance Group's earnings, revenue and cash flow.
A Different Perspective
White Mountains Insurance Group shareholders are up 30% for the year (even including dividends). Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 7% over half a decade It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand White Mountains Insurance Group better, we need to consider many other factors. For instance, we've identified 1 warning sign for White Mountains Insurance Group that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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.
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