If you bought Atkore (NYSE: ATKR) shares five years ago, you could pocket a 337% gain today
For many, the main goal of investing in the stock market is to earn spectacular returns. While not all stocks work well, when investors win they can win big. For example, the Atkore Inc. (NYSE: ATKR) The stock price has risen 337% over the past half-decade, a nice return for long-term holders. If that doesn’t make you think about investing for the long term, we don’t know what will. Then again, the 9.6% drop in the share price wasn’t all that fun for shareholders.
See our latest review for Atkore
In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. By comparing earnings per share (EPS) and changes in the share price over time, we can get a sense of how investors’ attitudes towards a company have changed over time.
During the five years of share price growth, Atkore achieved compound earnings per share (EPS) growth of 91% per year. This EPS growth is higher than the 34% average annual increase in the share price. So it looks like the market isn’t that keen on the stock these days. The reasonably low P / E ratio of 11.65 also suggests some apprehension in the market.
The graph below illustrates the evolution of EPS over time (reveal the exact values by clicking on the image).
It is of course great to see how Atkore has increased its profits over the years, but the future is more important to shareholders. It might be worth taking a look at our free report on changes in their financial situation over time.
A different perspective
We are pleased to report that Atkore shareholders received a total shareholder return of 168% over one year. As the 1-year TSR is better than the 5-year TSR (the latter standing at 34% per year), it seems that the stock’s performance has improved in recent times. Since the stock price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, know that Atkore shows 4 warning signs in our investment analysis , and 1 of them is potentially serious …
If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of companies that have proven they can increase their profits.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the US stock exchanges.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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