Advertisement
Canada markets close in 4 hours 23 minutes
  • S&P/TSX

    22,176.48
    +69.40 (+0.31%)
     
  • S&P 500

    5,253.48
    +4.99 (+0.10%)
     
  • DOW

    39,774.63
    +14.55 (+0.04%)
     
  • CAD/USD

    0.7384
    +0.0012 (+0.16%)
     
  • CRUDE OIL

    82.62
    +1.27 (+1.56%)
     
  • Bitcoin CAD

    96,251.34
    +2,381.78 (+2.54%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,236.10
    +23.40 (+1.06%)
     
  • RUSSELL 2000

    2,127.84
    +13.49 (+0.64%)
     
  • 10-Yr Bond

    4.1930
    -0.0030 (-0.07%)
     
  • NASDAQ

    16,400.34
    +0.82 (+0.00%)
     
  • VOLATILITY

    12.99
    +0.21 (+1.64%)
     
  • FTSE

    7,970.27
    +38.29 (+0.48%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6834
    +0.0029 (+0.43%)
     

Investors in Badger Infrastructure Solutions (TSE:BDGI) have unfortunately lost 30% over the last three years

For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you try your hand at stock picking, your risk returning less than the market. Unfortunately, that's been the case for longer term Badger Infrastructure Solutions Ltd. (TSE:BDGI) shareholders, since the share price is down 33% in the last three years, falling well short of the market return of around 38%. In contrast, the stock price has popped 8.8% in the last thirty days. However, this may be a matter of broader market optimism, since stocks are up 4.5% in the same time.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

Check out our latest analysis for Badger Infrastructure Solutions

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

ADVERTISEMENT

Badger Infrastructure Solutions saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But it's safe to say we'd generally expect the share price to be lower as a result!

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Badger Infrastructure Solutions the TSR over the last 3 years was -30%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Investors in Badger Infrastructure Solutions had a tough year, with a total loss of 10% (including dividends), against a market gain of about 2.6%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Badger Infrastructure Solutions better, we need to consider many other factors. For instance, we've identified 2 warning signs for Badger Infrastructure Solutions that you should be aware of.

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 CA exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here