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Par Pacific Holdings, Inc. (NYSE:PARR) shareholders should be happy to see the share price up 13% in the last quarter. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 53% in that time. Some might say the recent bounce is to be expected after such a bad drop. You could argue that the sell-off was too severe.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
View our latest analysis for Par Pacific Holdings
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.
Unfortunately Par Pacific Holdings reported an EPS drop of 38% for the last year. The share price decline of 53% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. The P/E ratio of 3.21 also points to the negative market sentiment.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It is of course excellent to see how Par Pacific Holdings has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Par Pacific Holdings shareholders are down 53% for the year, but the market itself is up 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.8% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. To that end, you should learn about the 2 warning signs we've spotted with Par Pacific Holdings (including 1 which is significant) .
If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.