Even if this is not enough for some shareholders, we believe it is good Spin Master Corp. (TSE:TOY) The share price rose 12% in a single quarter. However, that does not change the fact that the returns over the past three years have been anything but encouraging. In fact, the share price has fallen 32% over the past three years, well below the market return.
While the stock is up 3.7% in the past week, long-term shareholders are still in the red, so let’s see what the fundamentals tell us.
Check out our latest analysis for Spin Master
There’s no denying that markets are sometimes efficient, but prices don’t always reflect underlying business performance. A flawed but reasonable way to assess how sentiment toward a company has changed is to compare earnings per share (EPS) with the share price.
Spin Master has seen an average annual decline in earnings of 28% over the past three years. In comparison, the average annual share price decline of 12% is not as bad as the decline in earnings. This suggests that despite past earnings declines, the market remains optimistic about long-term earnings stability. At a P/E ratio of 53.51, it’s fair to say the market sees a brighter future for the company.
Below you can see how EPS has changed over time (click on the image to see the exact values).
The free Spin Master’s interactive earnings, revenue and cash flow report is a good place to start if you want to investigate the stock further.
A different perspective
While the broader market gained about 20% over the past year, Spin Master shareholders lost 8.0% (even including dividends). Even good stock share prices fall sometimes, but we want to see improvements in a company’s fundamental metrics before getting too interested. Unfortunately, last year’s performance caps off a poor streak, with shareholders suffering a total loss of 4% per year over five years. Generally speaking, long-term share price weakness can be a bad sign, although contrarian investors may want to study the stock in the hope of a turnaround. It is always interesting to follow share price performance over a longer period of time. But to better understand Spin Master, we need to consider many other factors. To that end, you should be aware of the following factors: 2 warning signs we discovered it at Spin Master.
We’ll like Spin Master better if we see some big insider buying. While we wait, check out this free List of undervalued stocks (mostly small caps) with significant recent insider purchases.
Please note that the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.
Do you have feedback on this article? Are you concerned about the content? Contact us directly from us. Alternatively, send an email to editorial-team (at) simplywallst.com.
This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
