Did You Miss NI Holdings' (NASDAQ:NODK) 11% Share Price Gain?

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if you choose that path, you're going to buy some stocks that fall short of the market. For example, the NI Holdings, Inc. (NASDAQ:NODK), share price is up over the last year, but its gain of 11% trails the market return. Having said that, the longer term returns aren't so impressive, with stock gaining just 3.8% in three years.

See our latest analysis for NI 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.

During the last year NI Holdings grew its earnings per share (EPS) by 50%. This EPS growth is significantly higher than the 11% increase in the share price. So it seems like the market has cooled on NI Holdings, despite the growth. Interesting. This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.38.

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

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on NI Holdings' earnings, revenue and cash flow.

A Different Perspective

NI Holdings shareholders are up 11% for the year. Unfortunately this falls short of the market return of around 25%. On the other hand, the TSR over three years was worse, at just 1.2% per year. This suggests the company's position is improving. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

NI Holdings is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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