Alpha Pro Tech, Ltd. (NYSEMKT:APT) shareholders might be concerned after seeing the share price drop 14% in the last week. But that doesn't undermine the fantastic longer term performance (measured over five years). Indeed, the share price is up a whopping 894% in that time. Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price.
It really delights us to see such great share price performance for investors.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over half a decade, Alpha Pro Tech managed to grow its earnings per share at 83% a year. This EPS growth is higher than the 58% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. The reasonably low P/E ratio of 11.24 also suggests market apprehension.
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 Alpha Pro Tech has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Alpha Pro Tech stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's nice to see that Alpha Pro Tech shareholders have received a total shareholder return of 236% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 58% per year), it would seem that the stock's performance has improved in recent times. 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 Alpha Pro Tech better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Alpha Pro Tech you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are 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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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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