Optimism around Orion (NYSE:OEC) delivering new earnings growth may be shrinking as stock declines 6.4% this past week

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Orion S.A. (NYSE:OEC) share price slid 18% over twelve months. That contrasts poorly with the market return of 35%. However, the longer term returns haven't been so bad, with the stock down 12% in the last three years. It's down 22% in about a quarter.

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

See our latest analysis for Orion

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 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).

Unhappily, Orion had to report a 31% decline in EPS over the last year. This fall in the EPS is significantly worse than the 18% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Orion's earnings, revenue and cash flow.

A Different Perspective

Investors in Orion had a tough year, with a total loss of 18% (including dividends), against a market gain of about 35%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.3% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Take risks, for example - Orion has 2 warning signs we think you should be aware of.

Orion is not the only stock that insiders are buying. For those who like to find lesser know companies 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 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.