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We believe investing is smart because history shows that stock markets go higher in the long term. But if you choose that path, you're going to buy some stocks that fall short of the market. Over the last year the PhenixFIN Corporation (NASDAQ:PFX) share price is up 27%, but that's less than the broader market return. The longer term returns have not been as good, with the stock price only 11% higher than it was three years ago.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
Check out our latest analysis for PhenixFIN
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
PhenixFIN was able to grow EPS by 37% in the last twelve months. This EPS growth is significantly higher than the 27% increase in the share price. Therefore, it seems the market isn't as excited about PhenixFIN as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 4.84.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. 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 PhenixFIN's earnings, revenue and cash flow.
What About The Total Shareholder Return (TSR)?
Investors should note that there's a difference between PhenixFIN's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that PhenixFIN's TSR of 31% over the last 1 year is better than the share price return.
A Different Perspective
PhenixFIN shareholders are up 31% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 0.5% per year, over five years. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand PhenixFIN better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with PhenixFIN (including 2 which are a bit concerning) .