Yahoo Finance Photronics (NASDAQ:PLAB) sheds 5.0% this week, as yearly returns fall more in line with earnings growth
Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Photronics share price has climbed 84% in five years, easily topping the market return of 39% (ignoring dividends).
In light of the stock dropping 5.0% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.
Check out our latest analysis for Photronics
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Over half a decade, Photronics managed to grow its earnings per share at 48% a year. The EPS growth is more impressive than the yearly share price gain of 13% over the same period. So one could conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 9.62.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Photronics has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Photronics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While it's never nice to take a loss, Photronics shareholders can take comfort that their trailing twelve month loss of 4.0% wasn't as bad as the market loss of around 6.9%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 13% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. Before deciding if you like the current share price, check how Photronics scores on these 3 valuation metrics.
If you are like me, then you will 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.
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