Strattec Security (NASDAQ:STRT) rallies 13% this week, taking one-year gains to 70%

The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the Strattec Security Corporation (NASDAQ:STRT) share price is up 70% in the last 1 year, clearly besting the market return of around 40% (not including dividends). So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 13% in three years.

The past week has proven to be lucrative for Strattec Security investors, so let's see if fundamentals drove the company's one-year performance.

View our latest analysis for Strattec Security

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

During the last year Strattec Security grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

However the year on year revenue growth of 9.1% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that Strattec Security has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Strattec Security will earn in the future (free profit forecasts).

A Different Perspective

It's good to see that Strattec Security has rewarded shareholders with a total shareholder return of 70% in the last twelve months. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Strattec Security better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Strattec Security (of which 1 is concerning!) you should know about.

For those who like to find winning investments this free list of undervalued 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 American 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.