While Enerplus (TSE:ERF) shareholders are in the dark over 1 year, those who bought a week ago are not so lucky
Unfortunately, investing is risky – companies can and do fail. But if you choose the right stock, you can earn a lot Continued more than 100%. For example, the Enerplus Corporation (TSE:ERF) stock price soared 143% in a single year. Additionally, the stock price rose 20% in about a quarter. Equally impressive, the stock is up 37% over three years, which also makes long-term shareholders happy.
Although the stock has fallen 7.3% this week, it is worth focusing on the long term and seeing if historical stock returns have been driven by underlying fundamentals.
Check out our latest analysis for Enerplus
In his test The Graham-and-Doddsville super-investors Warren Buffett has described how stock prices don’t always rationally reflect a company’s value. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.
Enerplus has gone from a loss to a profit over the past year.
The result seems to us to be a strong improvement, so we are not surprised that the market appreciates the growth. Inflection points like this can be a good time to take a closer look at a business.
The image below shows how EPS has tracked over time (if you click on the image you can see more details).
It’s probably worth noting that we’ve seen significant insider buying over the past quarter, which we view as a positive. On the other hand, we believe revenue and earnings trends are much more meaningful measures of the business. This free Enerplus’ Interactive Earnings, Revenue and Cash Flow Report is a great place to start if you want to dig deeper into the stock.
What about dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price performance. While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. It can be said that the TSR gives a more complete picture of the return generated by a stock. In the case of Enerplus, it has a TSR of 147% for the last year. This exceeds the performance of its share price that we mentioned earlier. This is largely the result of its dividend payments!
A different perspective
We are pleased to report that Enerplus shareholders received a one-year total shareholder return of 147%. This includes the dividend. This gain is better than the five-year annual TSR, which is 11%. Therefore, it seems that the sentiment around the company has been positive lately. Someone with an optimistic outlook might see the recent improvement in TSR as indicating that the company itself is improving over time. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. For example, we have identified 1 warning sign for Enerplus of which you should be aware.
There are many other companies whose insiders buy shares. You probably do do not want to miss this free list of growing companies insiders are buying.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on CA exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.