Yahoo Finance If You Had Bought Lamb Weston Holdings (NYSE:LW) Stock A Year Ago, You Could Pocket A 21% Gain Today
On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Unfortunately for shareholders, while the Lamb Weston Holdings, Inc. (NYSE:LW) share price is up 21% in the last year, that falls short of the market return. Longer term, the stock is up 17% in three years.
View our latest analysis for Lamb Weston Holdings
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).
Over the last twelve months, Lamb Weston Holdings actually shrank its EPS by 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.
We doubt the modest 1.2% dividend yield is doing much to support the share price. Unfortunately Lamb Weston Holdings' fell 11% over twelve months. So the fundamental metrics don't provide an obvious explanation for the share price gain.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
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. If you are thinking of buying or selling Lamb Weston Holdings stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Lamb Weston Holdings produced a TSR of 23% over the last year. It's always nice to make money but this return falls short of the market return which was about 41% for the year. On the other hand, the TSR over three years was worse, at just 7% per year. This suggests the company's position is improving. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 2 warning signs we've spotted with Lamb Weston Holdings (including 1 which can't be ignored) .
Lamb Weston Holdings 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 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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