While not a mind-blowing move, it is good to see that the Claros Mortgage Trust, Inc. (NYSE:CMTG) share price has gained 24% in the last three months. It's not great that the stock is down over the last year. But at least it bettered the loss of 19% in its market.
On a more encouraging note the company has added US$83m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
View our latest analysis for Claros Mortgage Trust
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Unfortunately Claros Mortgage Trust reported an EPS drop of 27% for the last year. The share price fall of 14% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
NYSE:CMTG Earnings Per Share Growth January 10th 2023
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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Claros Mortgage Trust the TSR over the last 1 year was -6.0%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's not great that Claros Mortgage Trust shares failed to make money for shareholders in the last year, but the silver lining is that the loss of 6.0%, including dividends, wasn't as bad as the broader market loss of about 19%. On the plus side, the share price has bounced a full 24% in the last three months. The recent uptick could be an early suggestion that the prior falls were too extreme; but we'll need to see how the business progresses. It's always interesting to track share price performance over the longer term. But to understand Claros Mortgage Trust better, we need to consider many other factors. Even so, be aware that Claros Mortgage Trust is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...
Claros Mortgage Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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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