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It hasn't been the best quarter for Argo Blockchain plc (LON:ARB) shareholders, since the share price has fallen 19% in that time. But that doesn't displace its brilliant performance over three years. Over that time, we've been excited to watch the share price climb an impressive 662%. As long term investors the recent fall doesn't detract all that much from the longer term story. The only way to form a view of whether the current price is justified is to consider the merits of the business itself. Anyone who held for that rewarding ride would probably be keen to talk about it.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
View our latest analysis for Argo Blockchain
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. 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.
Argo Blockchain became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Argo Blockchain has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Over the last year, Argo Blockchain shareholders took a loss of 65%. In contrast the market gained about 0.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 97% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Argo Blockchain (of which 1 shouldn't be ignored!) you should know about.
Of course Argo Blockchain may not be the best stock to buy. So you may wish to see this free collection of growth stocks.