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If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the United States Cellular Corporation (NYSE:USM) share price is 73% higher than it was a year ago, much better than the market return of around 4.3% in the same period. If it can keep that out-performance up over the long term, investors will do very well! It is also impressive that the stock is up 39% over three years, adding to the sense that it is a real winner.
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…’ By comparing earnings per share (EPS) and and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last year United States Cellular grew its earnings per share, moving from a loss to a profit. The company was close to break-even last year, so earnings per share of US$4.73 isn’t particularly stand out. But judging by the share price, the market is happy with the maiden profit. Inflection points like this can be a great time to take a closer look at a company.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on United States Cellular’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
It’s good to see that United States Cellular has rewarded shareholders with a total shareholder return of 73% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8.6% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. If you would like to research United States Cellular in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course United States Cellular may not be the best stock to buy. So you may wish to see this free collection of growth stocks.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 firstname.lastname@example.org. 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.