Can You Imagine How L.B. Foster's (NASDAQ:FSTR) Shareholders Feel About The 44% Share Price Increase?

We believe investing is smart because history shows that stock markets go higher in the long term. But not every stock you buy will perform as well as the overall market. For example, the L.B. Foster Company (NASDAQ:FSTR), share price is up over the last year, but its gain of 44% trails the market return. On the other hand, longer term shareholders have had a tougher run, with the stock falling 25% in three years.

View our latest analysis for L.B. Foster

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year, L.B. Foster actually saw its earnings per share drop 47%.

So we don't think that investors are paying too much attention to EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

Unfortunately L.B. Foster's fell 19% over twelve months. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth

We know that L.B. Foster 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 L.B. Foster stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

L.B. Foster shareholders gained a total return of 44% during the year. Unfortunately this falls short of the market return. The silver lining is that the gain was actually better than the average annual return of 1.0% per year over five year. This suggests the company might be improving over time. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for L.B. Foster (of which 1 doesn't sit too well with us!) you should know about.

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.

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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