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It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Unfortunately the Allient Inc. (NASDAQ:ALNT) share price slid 39% over twelve months. That contrasts poorly with the market return of 24%. To make matters worse, the returns over three years have also been really disappointing (the share price is 39% lower than three years ago). Shareholders have had an even rougher run lately, with the share price down 27% in the last 90 days.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
Check out our latest analysis for Allient
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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, Allient had to report a 21% decline in EPS over the last year. The share price decline of 39% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
This free interactive report on Allient's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in Allient had a tough year, with a total loss of 39% (including dividends), against a market gain of about 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality 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. To that end, you should learn about the 2 warning signs we've spotted with Allient (including 1 which is potentially serious) .
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.