Yahoo Finance Arcadium Lithium (NYSE:ALTM) stock falls 8.3% in past week as one-year earnings and shareholder returns continue downward trend
Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Arcadium Lithium plc (NYSE:ALTM) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 60%. We note that it has not been easy for shareholders over three years, either; the share price is down 52% in that time. Shareholders have had an even rougher run lately, with the share price down 15% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
After losing 8.3% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
See our latest analysis for Arcadium Lithium
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.
Unhappily, Arcadium Lithium had to report a 50% decline in EPS over the last year. We note that the 60% share price drop is very close to the EPS drop. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Instead, the change in the share price seems to reduction in earnings per share, alone.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on Arcadium Lithium's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Arcadium Lithium shareholders are down 60% for the year, but the market itself is up 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 7% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Arcadium Lithium you should know about.
Arcadium Lithium is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been 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.
