Yahoo Finance Sandstorm Gold's (TSE:SSL) five-year earnings growth trails the decent shareholder returns
Sandstorm Gold Ltd. (TSE:SSL) shareholders might be concerned after seeing the share price drop 20% in the last quarter. On the bright side the returns have been quite good over the last half decade. It has returned a market beating 69% in that time.
Since it's been a strong week for Sandstorm Gold shareholders, let's have a look at trend of the longer term fundamentals.
View our latest analysis for Sandstorm Gold
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...' 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.
During five years of share price growth, Sandstorm Gold achieved compound earnings per share (EPS) growth of 5.2% per year. This EPS growth is slower than the share price growth of 11% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Sandstorm Gold's earnings, revenue and cash flow.
A Different Perspective
Investors in Sandstorm Gold had a tough year, with a total loss of 21% (including dividends), against a market gain of about 0.6%. 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. On the bright side, long term shareholders have made money, with a gain of 11% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Sandstorm Gold (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.
Sandstorm Gold 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 CA 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.
