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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Cadre Holdings, Inc. (NYSE:CDRE) share price is up 16% in the last 1 year, clearly besting the market return of around 12% (not including dividends). So that should have shareholders smiling. Cadre Holdings hasn't been listed for long, so it's still not clear if it is a long term winner.
The past week has proven to be lucrative for Cadre Holdings investors, so let's see if fundamentals drove the company's one-year performance.
See our latest analysis for Cadre Holdings
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Cadre Holdings went from making a loss to reporting a profit, in the last year.
When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).
We are skeptical of the suggestion that the 1.4% dividend yield would entice buyers to the stock. We think that the revenue growth of 10% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We know that Cadre Holdings has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Cadre Holdings in this interactive graph of future profit estimates.
A Different Perspective
Cadre Holdings shareholders should be happy with the total gain of 17% over the last twelve months, including dividends. And the share price momentum remains respectable, with a gain of 12% in the last three months. This suggests the company is continuing to win over new investors. 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. For instance, we've identified 2 warning signs for Cadre Holdings that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.