Yahoo Finance AdaptHealth (NASDAQ:AHCO) adds US$285m to market cap in the past 7 days, though investors from a year ago are still down 39%
It's nice to see the AdaptHealth Corp. (NASDAQ:AHCO) share price up 17% in a week. But that doesn't change the fact that the returns over the last year have been less than pleasing. The cold reality is that the stock has dropped 39% in one year, under-performing the market.
The recent uptick of 17% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
Check out our latest analysis for AdaptHealth
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.
During the last year AdaptHealth 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.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on AdaptHealth's earnings, revenue and cash flow.
A Different Perspective
We doubt AdaptHealth shareholders are happy with the loss of 39% over twelve months. That falls short of the market, which lost 9.8%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 17%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with AdaptHealth (including 1 which doesn't sit too well with us) .
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.
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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.
