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Investors can earn very close to the average market return by buying an index fund. But in any given year a good portion of stocks will fall short of that. That's what happened in the case of Integra LifeSciences Holdings Corporation (NASDAQ:IART): its share price dropped 20% while the market declined 18%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 0.8% in three years. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days. Of course, this share price action may well have been influenced by the 17% decline in the broader market, throughout the period.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).
Unhappily, Integra LifeSciences Holdings had to report a 8.0% decline in EPS over the last year. The share price decline of 20% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized 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. It might be well worthwhile taking a look at our free report on Integra LifeSciences Holdings' earnings, revenue and cash flow.
A Different Perspective
While the broader market lost about 18% in the twelve months, Integra LifeSciences Holdings shareholders did even worse, losing 20%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 0.3%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Integra LifeSciences Holdings better, we need to consider many other factors. Even so, be aware that Integra LifeSciences Holdings is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
We will like Integra LifeSciences Holdings 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 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.