Smart Sand, Inc. (NASDAQ:SND) shareholders will doubtless be very grateful to see the share price up 81% in the last quarter. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 35% in one year, under-performing the market.
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 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.
Unhappily, Smart Sand had to report a 14% decline in EPS over the last year. This reduction in EPS is not as bad as the 35% share price fall. So it seems the market was too confident about the business, a year ago. The P/E ratio of 9.30 also points to the negative market sentiment.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Smart Sand's earnings, revenue and cash flow.
A Different Perspective
While Smart Sand shareholders are down 35% for the year, the market itself is up 9.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 81%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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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