Yahoo Finance Some United States Steel (NYSE:X) Shareholders Have Copped A Big 58% Share Price Drop
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Even the best stock pickers will make plenty of bad investments. And unfortunately for United States Steel Corporation (NYSE:X) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 58% in that time. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 22% in three years. Furthermore, it's down 25% in about a quarter. That's not much fun for holders.
See our latest analysis for United States Steel
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the unfortunate twelve months during which the United States Steel share price fell, it actually saw its earnings per share (EPS) improve by 96%. It could be that the share price was previously over-hyped. The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.
Given the yield is quite low, at 1.4%, we doubt the dividend can shed much light on the share price. United States Steel managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
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. If you are thinking of buying or selling United States Steel stock, you should check out this free report showing analyst profit forecasts.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between United States Steel's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. United States Steel's TSR of was a loss of 58% for the year. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
United States Steel shareholders are down 58% for the year (even including dividends), but the market itself is up 7.2%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of United States Steel by clicking this link.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
