Did You Miss Universal Technical Institute’s (NYSE:UTI) Impressive 111% Share Price Gain?

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. To wit, the Universal Technical Institute, Inc. (NYSE:UTI) share price has flown 111% in the last three years. Most would be happy with that. Also pleasing for shareholders was the 37% gain in the last three months. But this could be related to the strong market, which is up 20% in the last three months.

See our latest analysis for Universal Technical Institute

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 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.

Universal Technical Institute became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

earnings-per-share-growth
NYSE:UTI Earnings Per Share Growth July 23rd 2020

It’s probably worth noting that the CEO is paid less than the median at similar sized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Universal Technical Institute’s earnings, revenue and cash flow.

A Different Perspective

It’s good to see that Universal Technical Institute has rewarded shareholders with a total shareholder return of 109% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4.1% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For instance, we’ve identified 3 warning signs for Universal Technical Institute that you should be aware of.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.

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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