Investors one-year losses continue as Par Pacific Holdings (NYSE:PARR) dips a further 11% this week, earnings continue to decline

The nature of investing is that you win some, and you lose some. And there's no doubt that Par Pacific Holdings, Inc. (NYSE:PARR) stock has had a really bad year. In that relatively short period, the share price has plunged 60%. The silver lining (for longer term investors) is that the stock is still 7.6% higher than it was three years ago. Even worse, it's down 13% in about a month, which isn't fun at all.

If the past week is anything to go by, investor sentiment for Par Pacific Holdings isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Par Pacific 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...' 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.

Unfortunately Par Pacific Holdings reported an EPS drop of 38% for the last year. The share price decline of 60% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. The less favorable sentiment is reflected in its current P/E ratio of 2.85.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Par Pacific Holdings has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Par Pacific Holdings shareholders are down 60% for the year, but the market itself is up 23%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality 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. For example, we've discovered 2 warning signs for Par Pacific Holdings (1 is significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.