Yahoo Finance Investors in Great Lakes Dredge & Dock (NASDAQ:GLDD) have unfortunately lost 53% over the last three years
Investing in stocks inevitably means buying into some companies that perform poorly. Long term Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 53% in that time. Even worse, it's down 12% in about a month, which isn't fun at all. We do note, however, that the broader market is down 5.3% in that period, and this may have weighed on the share price.
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 Great Lakes Dredge & Dock
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...' 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.
During five years of share price growth, Great Lakes Dredge & Dock moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. So given the share price is down it's worth checking some other metrics too.
We think that the revenue decline over three years, at a rate of 7.8% per year, probably had some shareholders looking to sell. And that's not surprising, since it seems unlikely that EPS growth can continue for long in the absence of revenue growth.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We know that Great Lakes Dredge & Dock has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Great Lakes Dredge & Dock stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's good to see that Great Lakes Dredge & Dock has rewarded shareholders with a total shareholder return of 35% in the last twelve months. That certainly beats the loss of about 4% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Great Lakes Dredge & Dock (of which 1 is a bit unpleasant!) you should know about.
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 American 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.
