Yahoo Finance Algoma Steel Group (NASDAQ:ASTL) shareholders have endured a 48% loss from investing in the stock a year ago
The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Algoma Steel Group Inc. (NASDAQ:ASTL) share price is down 49% in the last year. That contrasts poorly with the market decline of 21%. We wouldn't rush to judgement on Algoma Steel Group because we don't have a long term history to look at. Furthermore, it's down 30% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for Algoma Steel Group
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Unhappily, Algoma Steel Group had to report a 22% decline in EPS over the last year. This reduction in EPS is not as bad as the 49% share price fall. This suggests the EPS fall has made some shareholders are more nervous about the business. The less favorable sentiment is reflected in its current P/E ratio of 1.22.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Algoma Steel Group's earnings, revenue and cash flow.
A Different Perspective
Algoma Steel Group shareholders are down 48% for the year (even including dividends), even worse than the market loss of 21%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 30%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Algoma Steel Group better, we need to consider many other factors. Even so, be aware that Algoma Steel Group is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...
Algoma Steel Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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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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.
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