Odfjell Technology Ltd. (OB:OTL) shareholders have seen the share price descend 19% over the month. But that doesn’t change the reality that over twelve months the stock has done really well. Looking at the full year, the company has easily bested an index fund by gaining 95%.
Although Odfjell Technology has shed kr264m from its market cap this week, let’s take a look at its longer term fundamental trends and see if they’ve driven returns.
Check out our latest analysis for Odfjell Technology
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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 the last year Odfjell Technology grew its earnings per share (EPS) by 3.9%. This EPS growth is significantly lower than the 95% increase in the share price. This indicates that the market is now more optimistic about the stock.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It might be well worthwhile taking a look at our free report on Odfjell Technology’s earnings, revenue and cash flow.
A Different Perspective
Odfjell Technology shareholders should be happy with the total gain of 95% over the last twelve months. That’s better than the more recent three month gain of 8.6%, implying that share price has plateaued recently. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). 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. For example, we’ve discovered 2 warning signs for Odfjell Technology (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
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 Norwegian 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.
