Investors three-year losses continue as Sandstorm Gold (TSE:SSL) dips a further 4.2% this week, earnings continue to decline

While not a mind-blowing move, it is good to see that the Sandstorm Gold Ltd. (TSE:SSL) share price has gained 17% in the last three months. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 32% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

After losing 4.2% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Sandstorm Gold

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the three years that the share price fell, Sandstorm Gold's earnings per share (EPS) dropped by 22% each year. This fall in the EPS is worse than the 12% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines. This positive sentiment is also reflected in the generous P/E ratio of 73.06.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Sandstorm Gold's earnings, revenue and cash flow.

A Different Perspective

Sandstorm Gold provided a TSR of 7.6% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 0.7% over half a decade This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Sandstorm Gold better, we need to consider many other factors. Take risks, for example - Sandstorm Gold has 2 warning signs we think you should be aware of.

Sandstorm Gold is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.