Mohawk Industries' (NYSE:MHK) Shareholders Are Down 32% On Their Shares

It is a pleasure to report that the Mohawk Industries, Inc. (NYSE:MHK) is up 32% in the last quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 32% in the last three years, significantly under-performing the market.

Check out our latest analysis for Mohawk Industries

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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 three years that the share price fell, Mohawk Industries' earnings per share (EPS) dropped by 18% each year. This fall in the EPS is worse than the 12% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Mohawk Industries' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Mohawk Industries shareholders gained a total return of 27% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 0.7% endured over half a decade. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand Mohawk Industries better, we need to consider many other factors. For instance, we've identified 2 warning signs for Mohawk Industries that you should be aware of.

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 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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