Biglari Holdings (NYSE:BH.A) delivers shareholders respectable 85% return over 1 year, surging 11% in the last week alone

By
Simply Wall St
Published
August 13, 2021
NYSE:BH.A
Source: Shutterstock

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Biglari Holdings Inc. (NYSE:BH.A) share price is 85% higher than it was a year ago, much better than the market return of around 34% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! On the other hand, longer term shareholders have had a tougher run, with the stock falling 7.1% in three years.

The past week has proven to be lucrative for Biglari Holdings investors, so let's see if fundamentals drove the company's one-year performance.

View our latest analysis for Biglari Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Biglari Holdings went from making a loss to reporting a profit, in the last year.

The result looks like a strong improvement to us, so we're not surprised the market likes the growth. Generally speaking the profitability inflection point is a great time to research a company closely, lest you miss an opportunity to profit.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
NYSE:BH.A Earnings Per Share Growth August 14th 2021

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Biglari Holdings' earnings, revenue and cash flow.

A Different Perspective

Pleasingly, Biglari Holdings' total shareholder return last year was 85%. What is absolutely clear is that is far preferable to the dismal 2.3% average annual loss suffered over the last three years. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Biglari Holdings (including 1 which doesn't sit too well with us) .

Of course Biglari Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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