Yahoo Finance While shareholders of HighPeak Energy (NASDAQ:HPK) are in the black over 1 year, those who bought a week ago aren't so fortunate
HighPeak Energy, Inc. (NASDAQ:HPK) shareholders might understandably be very concerned that the share price has dropped 32% in the last quarter. But that doesn't detract from the splendid returns of the last year. Like an eagle, the share price soared 114% in that time. So some might not be surprised to see the price retrace some. More important, going forward, is how the business itself is going.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
View our latest analysis for HighPeak Energy
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).
During the last year HighPeak Energy grew its earnings per share, moving from a loss to a profit.
When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).
We are skeptical of the suggestion that the 0.5% dividend yield would entice buyers to the stock. We think that the revenue growth of 373% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for HighPeak Energy in this interactive graph of future profit estimates.
A Different Perspective
It's nice to see that HighPeak Energy shareholders have gained 116% (in total) over the last year. That's including the dividend. That gain actually surpasses the 24% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. It's always interesting to track share price performance over the longer term. But to understand HighPeak Energy better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for HighPeak Energy you should be aware of, and 1 of them makes us a bit uncomfortable.
HighPeak Energy 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.
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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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