The last three months have been tough on American Realty Investors, Inc. (NYSE:ARL) shareholders, who have seen the share price decline a rather worrying 34%. On the other hand the share price is higher than it was three years ago. However, it's unlikely many shareholders are elated with the share price gain of 15% over that time, given the rising market.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for American Realty Investors

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...' 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).

American Realty Investors became profitable within the last three years. So we would expect a higher share price over the period.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on American Realty Investors' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

American Realty Investors shareholders are up 10% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 3% endured over half a decade. So this might be a sign the business has turned its fortunes around. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for American Realty Investors you should be aware of.

Of course American Realty Investors may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.