The Resolute Forest Products (NYSE:RFP) Share Price Is Up 250% And Shareholders Are Boasting About It

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example Resolute Forest Products Inc. (NYSE:RFP). Its share price is already up an impressive 250% in the last twelve months. It's also good to see the share price up 70% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. However, the stock hasn't done so well in the longer term, with the stock only up 17% in three years.

See our latest analysis for Resolute Forest Products

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Resolute Forest Products went from making a loss to reporting a profit, in the last year.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

Unfortunately Resolute Forest Products' fell 4.2% over twelve months. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We know that Resolute Forest Products has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for Resolute Forest Products in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Resolute Forest Products shareholders have received a total shareholder return of 250% over one year. That's better than the annualised return of 18% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Resolute Forest Products , and understanding them should be part of your investment process.

We will like Resolute Forest Products better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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