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The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of MMA Capital Holdings, Inc. (NASDAQ:MMAC) stock is up an impressive 229% over the last five years. In contrast, the stock has fallen 8.7% in the last 30 days.
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 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.
During five years of share price growth, MMA Capital Holdings actually saw its EPS drop 7.7% per year. Essentially, it doesn’t seem likely that investors are focused on EPS. Because earnings per share don’t seem to match up with the share price, we’ll take a look at other metrics instead.
It is not great to see that revenue has dropped by 31% per year over five years. So it seems one might have to take closer look at earnings and revenue trends to see how they might influence the share price.
This free interactive report on MMA Capital Holdings’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It’s nice to see that MMA Capital Holdings shareholders have received a total shareholder return of 23% over the last year. However, that falls short of the 27% TSR per annum it has made for shareholders, each year, over five years. Before spending more time on MMA Capital Holdings it might be wise to click here to see if insiders have been buying or selling shares.
Of course MMA Capital Holdings 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 US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.