Yahoo Finance Amneal Pharmaceuticals (NASDAQ:AMRX) shareholders are still up 235% over 1 year despite pulling back 8.0% in the past week
When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Amneal Pharmaceuticals, Inc. (NASDAQ:AMRX) share price has soared 235% in the last 1 year. Most would be very happy with that, especially in just one year! But it's down 8.0% in the last week. However, this might be related to the overall market decline of 1.7% in a week. In contrast, the longer term returns are negative, since the share price is 2.8% lower than it was three years ago.
While the stock has fallen 8.0% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
See our latest analysis for Amneal Pharmaceuticals
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over the last twelve months Amneal Pharmaceuticals went from profitable to unprofitable. While this may prove temporary, we'd consider it a negative, so we would not have expected to see the share price up. We might get a clue to explain the share price move by looking to other metrics.
We think that the revenue growth of 8.2% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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. You can see what analysts are predicting for Amneal Pharmaceuticals in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Amneal Pharmaceuticals has rewarded shareholders with a total shareholder return of 235% in the last twelve months. Notably the five-year annualised TSR loss of 9% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research Amneal Pharmaceuticals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like Amneal Pharmaceuticals 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.
