When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Arch Capital Group Ltd. (NASDAQ:ACGL) share price has soared 175% in the last half decade. Most would be very happy with that.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Arch Capital Group
There is no denying that markets are sometimes efficient, but prices do not always reflect 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.
Over half a decade, Arch Capital Group managed to grow its earnings per share at 32% a year. This EPS growth is higher than the 22% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 9.83 also suggests market apprehension.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Arch Capital Group has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
It's nice to see that Arch Capital Group shareholders have received a total shareholder return of 23% over the last year. That's better than the annualised return of 22% 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. Case in point: We've spotted 1 warning sign for Arch Capital Group you should be aware of.
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 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.
企業の株を買う場合、失敗する可能性があることと、お金を失う可能性があることを念頭に置いておく価値があると考えられます。ただし、実際に繁栄している企業を選択すると、100%以上の利益を得ることができます。例えば、Arch Capital Group Ltd. (NASDAQ: ACGL)の株価は過去半年間に175%も急上昇しました。多くの人々はこれに非常に満足しているでしょう。これに加え、長期的な株主リターンが企業の基盤のパフォーマンスとマッチしたかどうかを判断するために企業のファンダメンタル分析を行うことは有益です。 Arch Capital Groupに関する最新の分析を参照してください。100%以上の利益を出すことができます。過去半世紀で、Arch Capital GroupのEPSは年率32%で増加しています。このEPSの成長率は、株価の年平均増加率22%よりも高くなっています。このことから、市場が相対的に悲観的になっていることがわかります。低いP/E比率である9.83も、市場の懸念を示唆しています。
Arch Capital Groupが長年にわたって利益を増やしてきたことは非常に優れたことですが、将来は株主にとってもっと重要です。時間経過に伴い、財務状況がどのように変化したかについての無料レポートをご覧いただくことをお勧めします。
異なる視点で見ると、Arch Capital Groupの株主は過去1年間に23%の総株主リターンを受け取っていることがわかります。過去半世紀の年間リターン率22%よりも優れているため、最近は企業がより良い状況だと思われます。株価モメンタムが強いままであるため、株を見逃さないように注目することが価値があります。事実、ビジネスパフォーマンスのプロキシとして株価を長期的に見ることは非常に興味深いことです。しかし、真の洞察を得るためには、他の情報も考慮する必要があります。
ただし、Arch Capital Groupの株主は過去1年間に23%の総株主リターンを受け取っていることがわかります。企業の最近のパフォーマンスは過去半世紀の平均年率22%よりも優れているため、その企業が近年良い状況にあると判断されます。株価の勢いが強いため、株を見逃すことは避けるべきです。