It hasn't been the best quarter for Cooper-Standard Holdings Inc. (NYSE:CPS) shareholders, since the share price has fallen 20% in that time. But that doesn't change the fact that the returns over the last year have been very strong. Like an eagle, the share price soared 161% in that time. So it may be that the share price is simply cooling off after a strong rise. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
Because Cooper-Standard Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Cooper-Standard Holdings actually shrunk its revenue over the last year, with a reduction of 17%. We're a little surprised to see the share price pop 161% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Cooper-Standard Holdings' financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Cooper-Standard Holdings has rewarded shareholders with a total shareholder return of 161% in the last twelve months. That certainly beats the loss of about 11% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Cooper-Standard Holdings (of which 1 is a bit unpleasant!) you should know about.
We will like Cooper-Standard Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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