It's always best to build a diverse portfolio of shares, since any stock business could lag the broader market. But if you're going to beat the market overall, you need to have individual stocks that outperform. One such company is Bogota Financial Corp. (NASDAQ:BSBK), which saw its share price increase 33% in the last year, slightly above the market return of around 28% (not including dividends). Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
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.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Bogota Financial was able to grow EPS by 309% in the last twelve months. It's fair to say that the share price gain of 33% did not keep pace with the EPS growth. So it seems like the market has cooled on Bogota Financial, despite the growth. Interesting.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Bogota Financial has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Bogota Financial will grow revenue in the future.
A Different Perspective
Bogota Financial shareholders should be happy with the total gain of 33% over the last twelve months. The more recent returns haven't been as impressive as the longer term returns, coming in at just 2.2%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand Bogota Financial better, we need to consider many other factors. For instance, we've identified 3 warning signs for Bogota Financial (1 doesn't sit too well with us) that you should be aware of.
If you are like me, then you will 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.
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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