Investors in Skyline Champion (NYSE:SKY) have made a massive return of 367% over the past three years

By
Simply Wall St
Published
December 07, 2021
NYSE:SKY
Source: Shutterstock

We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. You won't get it right every time, but when you do, the returns can be truly splendid. One bright shining star stock has been Skyline Champion Corporation (NYSE:SKY), which is 367% higher than three years ago. On top of that, the share price is up 30% in about a quarter.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

Check out our latest analysis for Skyline Champion

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 three years of share price growth, Skyline Champion moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
NYSE:SKY Earnings Per Share Growth December 7th 2021

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

We're pleased to report that Skyline Champion rewarded shareholders with a total shareholder return of 158% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 67%. Given the track record of solid returns over varying time frames, it might be worth putting Skyline Champion on your watchlist. 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. For example, we've discovered 2 warning signs for Skyline Champion that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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