Forterra's (LON:FORT) Shareholders Are Down 32% On Their Shares

Forterra plc (LON:FORT) shareholders will doubtless be very grateful to see the share price up 40% in the last quarter. But in truth the last year hasn't been good for the share price. In fact, the price has declined 32% in a year, falling short of the returns you could get by investing in an index fund.

See our latest analysis for Forterra

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.

Forterra fell to a loss making position during the year. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. We hope for shareholders' sake that the company becomes profitable again soon.

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

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Forterra's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Forterra shareholders are down 32% for the year, falling short of the market return. Meanwhile, the broader market slid about 9.0%, likely weighing on the stock. The three-year loss of 5% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Forterra better, we need to consider many other factors. Even so, be aware that Forterra is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Forterra 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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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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