How Much Did Mind Gym's(LON:MIND) Shareholders Earn From Share Price Movements Over The Last Year?

Mind Gym plc (LON:MIND) shareholders should be happy to see the share price up 25% in the last month. But in truth the last year hasn't been good for the share price. The cold reality is that the stock has dropped 23% in one year, under-performing the market.

See our latest analysis for Mind Gym

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 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 unfortunate twelve months during which the Mind Gym share price fell, it actually saw its earnings per share (EPS) improve by 45%. It's quite possible that growth expectations may have been unreasonable in the past.

It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.

Mind Gym's revenue is actually up 14% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free report showing analyst forecasts should help you form a view on Mind Gym

A Different Perspective

We doubt Mind Gym shareholders are happy with the loss of 23% over twelve months. That falls short of the market, which lost 4.9%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. It's great to see a nice little 18% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. 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. To that end, you should be aware of the 1 warning sign we've spotted with Mind Gym .

Mind Gym is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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