Stock Analysis

Did Universal Logistics Holdings' (NASDAQ:ULH) Share Price Deserve to Gain 46%?

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NasdaqGS:ULH
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When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Furthermore, you'd generally like to see the share price rise faster than the market Unfortunately for shareholders, while the Universal Logistics Holdings, Inc. (NASDAQ:ULH) share price is up 46% in the last five years, that's less than the market return. Looking at the last year alone, the stock is up 8.7%.

View our latest analysis for Universal Logistics Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Over half a decade, Universal Logistics Holdings managed to grow its earnings per share at 1.5% a year. This EPS growth is lower than the 8% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.

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

earnings-per-share-growth
NasdaqGS:ULH Earnings Per Share Growth December 29th 2020

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. Dive deeper into the earnings by checking this interactive graph of Universal Logistics Holdings' earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Universal Logistics Holdings' total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Universal Logistics Holdings shareholders, and that cash payout contributed to why its TSR of 60%, over the last 5 years, is better than the share price return.

A Different Perspective

Universal Logistics Holdings shareholders are up 9.9% for the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 10% over half a decade It is possible that returns will improve along with the business fundamentals. It's always interesting to track share price performance over the longer term. But to understand Universal Logistics Holdings better, we need to consider many other factors. Even so, be aware that Universal Logistics Holdings is showing 1 warning sign in our investment analysis , you should know about...

Universal Logistics 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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