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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Investors in Accuracy Shipping Limited (NSE:ACCURACY) have tasted that bitter downside in the last year, as the share price dropped 27%. That's well bellow the market return of 1.5%. Because Accuracy Shipping hasn't been listed for many years, the market is still learning about how the business performs. Even worse, it's down 14% in about a month, which isn't fun at all. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
View our latest analysis for Accuracy Shipping
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Unhappily, Accuracy Shipping had to report a 47% decline in EPS over the last year. The share price fall of 27% isn't as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
While Accuracy Shipping shareholders are down 26% for the year (even including dividends), the market itself is up 1.5%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 5.3% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Accuracy Shipping is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.