This week, Siebert Financial Corporation (NASDAQ:SIEB) shares rose 19%. But the fact remains that the past five years of returns have been shocking. The stock price has fallen sharply in those five years, dropping 83%, so I don't have much confidence in the recent recovery. The real question is whether the company can put the past behind it and improve itself in the coming years. I really hope that anyone who survived this stock market crash has a diversified portfolio. Even if you lose money, you don't need to lose the lesson.
The last five years have been tough for Siebert Financial shareholders, but there was a bright spot last week, so let's take a look at the longer term fundamentals to see if they're driving the negative returns.
View our latest analysis for Siebert Financial
While the efficient market hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems and investors are not always rational. 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).
During the five-year period that the share price was declining, Siebert Financial's earnings per share (EPS) fell 8.4% annually. Readers should note that the share price has fallen faster than the EPS during this period, at a rate of 30% per year. This suggests that the market has become more cautious towards the company recently. This less favorable sentiment is reflected in the current P/E ratio of 7.37.
The chart below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
NasdaqCM:SIEB Earnings Per Share Growth Rate August 17, 2024
This free interactive report on Siebert Financial's earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
A different perspective
Siebert Financial shareholders are down 12% this year, while the market itself is up 27%. But remember that even the best stocks can underperform the market over a twelve month period. Unfortunately, longer term shareholders have been hit harder, with a loss of 13% over the last five years. To inspire much enthusiasm, we need to see sustained improvement in key metrics. While it's well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Let's look at risks, for example. Siebert Financial has 3 warning signs you should be aware of.
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the thing.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
