The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Cardinal Energy Ltd. (TSE:CJ) share price has soared 272% return in just a single year. It's also good to see the share price up 90% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. And shareholders have also done well over the long term, with an increase of 186% in the last three years.
The past week has proven to be lucrative for Cardinal Energy investors, so let's see if fundamentals drove the company's one-year performance.
See our latest analysis for Cardinal Energy
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
During the last year Cardinal Energy grew its earnings per share, moving from a loss to a profit.
We think the growth looks very prospective, so we're not surprised the market liked it too. Inflection points like this can be a great time to take a closer look at a company.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Cardinal Energy's earnings, revenue and cash flow.
A Different Perspective
It's good to see that Cardinal Energy has rewarded shareholders with a total shareholder return of 272% in the last twelve months. That's better than the annualised return of 6% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Even so, be aware that Cardinal Energy is showing 4 warning signs in our investment analysis , and 1 of those is a bit concerning...