One simple way to benefit from the stock market is to buy an index fund. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, REX American Resources Corporation (NYSE:REX) shareholders have seen the share price rise 81% over three years, well in excess of the market return (32%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 21%.
Since it's been a strong week for REX American Resources shareholders, let's have a look at trend of the longer term fundamentals.
See our latest analysis for REX American Resources
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 three years of share price growth, REX American Resources moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It is of course excellent to see how REX American Resources has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
It's nice to see that REX American Resources shareholders have received a total shareholder return of 21% over the last year. That's better than the annualised return of 7% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with REX American Resources , and understanding them should be part of your investment process.
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 American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
株式市場から利益を得る簡単な方法の1つは、インデックスファンドを購入することです。しかし、優良企業を魅力的な価格で買収すれば、ポートフォリオのリターンは平均市場リターンを上回る可能性があります。たとえば、 REX アメリカン・リソース・コーポレーション (NYSE: REX) の株主の株価は3年間で81%上昇し、市場のリターン (32%、配当を除く) をはるかに上回っています。一方、最近のリターンはそれほど良くなく、株主はわずか21%増加しています。
REX American Resourcesの株主にとっては好調な週だったので、長期的なファンダメンタルズの傾向を見てみましょう。
REX American Resourcesが長年にわたってどのように利益を伸ばしてきたかを見るのはもちろん素晴らしいことですが、株主にとって将来はより重要です。これで、貸借対照表が時間の経過とともにどのように強くなった(または弱くなった)かがわかります 無料 インタラクティブグラフィック。
別の視点
REX American Resourcesの株主は、過去1年間で合計21%の株主還元を受けたのは素晴らしいことです。これは、5年間の年間収益率7%よりも優れており、会社の業績が最近好調であることを示しています。株価の勢いが依然として強いことを考えると、機会を逃さないように、株式を詳しく調べてみる価値があるかもしれません。業績の指標として株価を長期的に見るのは非常に興味深いと思います。しかし、本当に洞察を得るには、他の情報も考慮する必要があります。たとえば、常に存在する投資リスクのスペクトルを考えてみましょう。 警告サインが 1 つ見つかりました REX American Resourcesを使って、それらを理解することは投資プロセスの一部であるべきです。