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Amerant Bancorp Inc. (NASDAQ:AMTB) shareholders should be happy to see the share price up 25% in the last month. But in truth the last year hasn't been good for the share price. In fact the stock is down 44% in the last year, well below the market return.
See our latest analysis for Amerant Bancorp
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the unfortunate twelve months during which the Amerant Bancorp share price fell, it actually saw its earnings per share (EPS) improve by 13%. It could be that the share price was previously over-hyped.
It's surprising to see the share price fall so much, despite the improved EPS. So it's easy to justify a look at some other metrics.
On the other hand, we're certainly perturbed by the 7.0% decline in Amerant Bancorp's revenue. If the market sees the weak revenue as jeopardising EPS, that could explain the lower share price.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Amerant Bancorp stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While Amerant Bancorp shareholders are down 44% for the year, the market itself is up 1.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 5.3% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Amerant Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.