Yahoo Finance The Roots (TSE:ROOT) Share Price Is Down 61% So Some Shareholders Are Wishing They Sold
Roots Corporation (TSE:ROOT) shareholders should be happy to see the share price up 23% in the last quarter. But that's not enough to compensate for the decline over the last twelve months. Like an arid lake in a warming world, shareholder value has evaporated, with the share price down 61% in that time. So the bounce should be viewed in that context. It may be that the fall was an overreaction.
See our latest analysis for Roots
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Unhappily, Roots had to report a 35% decline in EPS over the last year. This reduction in EPS is not as bad as the 61% share price fall. So it seems the market was too confident about the business, a year ago.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
While Roots shareholders are down 61% for the year, the market itself is up 8.0%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 23% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Roots by clicking this link.
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 CA exchanges.
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