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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by ICC Holdings, Inc. (NASDAQ:ICCH) shareholders over the last year, as the share price declined 18%. That’s disappointing when you consider the market returned 6.4%. Because ICC Holdings hasn’t been listed for many years, the market is still learning about how the business performs. Even worse, it’s down 9.4% in about a month, which isn’t fun at all.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Unhappily, ICC Holdings had to report a 2.6% decline in EPS over the last year. This reduction in EPS is not as bad as the 18% share price fall. This suggests the EPS fall has made some shareholders are more nervous about the business. Of course, with a P/E ratio of 77.48, the market remains optimistic.
This free interactive report on ICC Holdings’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While ICC Holdings shareholders are down 18% for the year, the market itself is up 6.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 8.9%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. If you would like to research ICC Holdings in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.