Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Ford Motor Company (NYSE:F) share price has soared 111% return in just a single year. It's also good to see the share price up 21% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. Looking back further, the stock price is 39% higher than it was three years ago.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
During the last year Ford Motor 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 think that the revenue growth of 4.6% 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).NYSE:F Earnings and Revenue Growth August 1st 2021
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. So it makes a lot of sense to check out what analysts think Ford Motor will earn in the future (free profit forecasts).
A Different Perspective
It's good to see that Ford Motor has rewarded shareholders with a total shareholder return of 111% in the last twelve months. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Ford Motor has 1 warning sign we think you should be aware of.
Ford Motor 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
In This StoryF
- NIO Inc.'s (NYSE:NIO) Shift From Loss To Profit
- New Oriental Education & Technology Group (NYSE:EDU) stock falls 12% in past week as one-year earnings and shareholder returns continue downward trend
- Dividend Investors: Don't Be Too Quick To Buy Merck & Co., Inc. (NYSE:MRK) For Its Upcoming Dividend
- Investors are selling off Alteryx (NYSE:AYX), lack of profits no doubt contribute to shareholders one-year loss