1/6/2023 0 Comments Coherence com![]() ![]() I find it very interesting to look at share price over the long term as a proxy for business performance. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. However, it could simply be that the share price has been impacted by broader market jitters. Unfortunately, that's worse than the broader market decline of 22%. We regret to report that Coherent shareholders are down 42% for the year. Dive deeper into the earnings by checking this interactive graph of Coherent's earnings, revenue and cash flow. That said, we think earnings and revenue growth trends are even more important factors to consider. It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. 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. To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn. Shareholders have had an even rougher run lately, with the share price down 29% in the last 90 days. ![]() On the other hand, the stock is actually up 6.6% over three years. That's well below the market decline of 22%. ( NASDAQ:COHR) share price slid 42% over twelve months. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. ![]()
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