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Recent 8.8% pullback isn't enough to hurt long-term Adient (NYSE:ADNT) shareholders, they're still up 514% over 3 years
Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. One bright shining star stock has been Adient plc (NYSE:ADNT), which is 514% higher than three years ago. It's also good to see the share price up 14% over the last quarter. Anyone who held for that rewarding ride would probably be keen to talk about it.
In light of the stock dropping 8.8% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.
See our latest analysis for Adient
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).
Adient became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Adient has grown profits over the years, but the future is more important for shareholders. This free interactive report on Adient's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Adient shareholders have received a total shareholder return of 6.0% over the last year. Notably the five-year annualised TSR loss of 6% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Before spending more time on Adient it might be wise to click here to see if insiders have been buying or selling shares.
But note: Adient may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Valuation is complex, but we're helping make it simple.
Find out whether Adient is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
Adient plc, an investment holding company, engages in the design, development, manufacture, and market of seating systems and components for passenger cars, commercial vehicles, and light trucks.
Good value with adequate balance sheet.