Yahoo Finance Fidelity National Information Services (NYSE:FIS shareholders incur further losses as stock declines 5.8% this week, taking one-year losses to 32%
It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. For example, the Fidelity National Information Services, Inc. (NYSE:FIS) share price is down 33% in the last year. That's disappointing when you consider the market declined 16%. However, the longer term returns haven't been so bad, with the stock down 19% in the last three years. And the share price decline continued over the last week, dropping some 5.8%. However, this move may have been influenced by the broader market, which fell 4.8% in that time.
Since Fidelity National Information Services has shed US$3.7b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
See our latest analysis for Fidelity National Information Services
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Fidelity National Information Services managed to increase earnings per share from a loss to a profit, over the last 12 months.
When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. But we may find different metrics more enlightening.
With a low yield of 1.9% we doubt that the dividend influences the share price much. Fidelity National Information Services' revenue is actually up 11% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think Fidelity National Information Services will earn in the future (free profit forecasts).
A Different Perspective
We regret to report that Fidelity National Information Services shareholders are down 32% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 16%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Fidelity National Information Services you should be aware of.
Fidelity National Information Services is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.
