The Arion banki hf (ICE:ARION) Share Price Is Up 26% And Shareholders Are Holding On

Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Arion banki hf. (ICE:ARION) share price is up 26% in the last year, clearly besting the market return of around 18% (not including dividends). That's a solid performance by our standards! We'll need to follow Arion banki hf for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for Arion banki hf

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

Arion banki hf was able to grow EPS by 31% in the last twelve months. It's fair to say that the share price gain of 26% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Arion banki hf as it was before. This could be an opportunity.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Arion banki hf's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Arion banki hf shareholders should be happy with the total gain of 26% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 18% in that time. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 1 warning sign for Arion banki hf that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

When trading Arion banki hf or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.