The nature of investing is that you win some, and you lose some. And there’s no doubt that CONSOL Energy Inc. (NYSE:CEIX) stock has had a really bad year. To wit the share price is down 68% in that time. We wouldn’t rush to judgement on CONSOL Energy because we don’t have a long term history to look at. Furthermore, it’s down 21% in about a quarter. That’s not much fun for holders. This could be related to the recent financial results – you can catch up on the most recent data by reading our company report.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).
Unhappily, CONSOL Energy had to report a 97% decline in EPS over the last year. This fall in the EPS is significantly worse than the 68% the share price fall. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 52.76, it’s fair to say the market sees an EPS rebound on the cards.
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 CONSOL Energy’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 25% in the last year, CONSOL Energy shareholders might be miffed that they lost 68%. While the aim is to do better than that, it’s worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 21% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example – CONSOL Energy has 4 warning signs (and 1 which is a bit unpleasant) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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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. 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.
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