Yahoo Finance Post Holdings' (NYSE:POST) investors will be pleased with their 18% return over the last year
It's understandable if you feel frustrated when a stock you own sees a lower share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. So while the Post Holdings, Inc. (NYSE:POST) share price is down 20% in the last year, the total return to shareholders (which includes dividends) was 18%. That's better than the market which declined 16% over the last year. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 15% in three years.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Post Holdings
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last year Post Holdings saw its earnings per share increase strongly. While the business is unlikely to sustain such a high growth rate for long, it's great to see. So we are surprised the share price is down. So it's worth taking a look at some other metrics.
Post Holdings managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The graphic below depicts how earnings and revenue have 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. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Post Holdings stock, you should check out this free report showing analyst profit forecasts.
What About The Total Shareholder Return (TSR)?
Investors should note that there's a difference between Post Holdings' total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that Post Holdings' TSR, at 18% is higher than its share price return of -20%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
We're pleased to report that Post Holdings shareholders have received a total shareholder return of 18% over one year. That's better than the annualised return of 12% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Post Holdings better, we need to consider many other factors. Even so, be aware that Post Holdings is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...
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 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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