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If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Concentrix Corporation (NASDAQ:CNXC) share price is 50% higher than it was a year ago, much better than the market return of around 13% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Concentrix for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
In light of the stock dropping 7.9% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.
See our latest analysis for Concentrix
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).
During the last year Concentrix grew its earnings per share (EPS) by 160%. This EPS growth is significantly higher than the 50% increase in the share price. So it seems like the market has cooled on Concentrix, despite the growth. Interesting.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Concentrix's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Concentrix shareholders should be happy with the total gain of 50% over the last twelve months, including dividends. Unfortunately the share price is down 9.8% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
But note: Concentrix may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.