Yahoo Finance Burford Capital (LON:BUR) investors are sitting on a loss of 57% if they invested three years ago
The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Burford Capital Limited (LON:BUR) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 58% decline in the share price in that time. The falls have accelerated recently, with the share price down 11% in the last three months.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Burford Capital
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).
Burford Capital saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Burford Capital's earnings, revenue and cash flow.
A Different Perspective
Burford Capital shareholders gained a total return of 9.5% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 1.2% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Burford Capital is not the only stock that insiders are buying. 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 GB 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.
