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It might be of some concern to shareholders to see the Hunting PLC (LON:HTG) share price down 17% in the last month. But over three years, the returns would have left most investors smiling In the last three years the share price is up, 65%: better than the market.
Since the long term performance has been good but there's been a recent pullback of 7.8%, let's check if the fundamentals match the share price.
View our latest analysis for Hunting
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 three years of share price growth, Hunting moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Hunting has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Hunting's financial health with this free report on its balance sheet.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Hunting, it has a TSR of 79% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's good to see that Hunting has rewarded shareholders with a total shareholder return of 25% in the last twelve months. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 0.2% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Hunting better, we need to consider many other factors. Even so, be aware that Hunting is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...