NYSE:MHK) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 67% drop in the share price over that period. And over the last year the share price fell 31%, so we doubt many shareholders are delighted. More recently, the share price has dropped a further 18% in a month.” data-reactid=”28″>If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Mohawk Industries, Inc. (NYSE:MHK) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 67% drop in the share price over that period. And over the last year the share price fell 31%, so we doubt many shareholders are delighted. More recently, the share price has dropped a further 18% in a month.
View our latest analysis for Mohawk Industries ” data-reactid=”29″>View our latest analysis for Mohawk Industries
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. 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.
Mohawk Industries saw its EPS decline at a compound rate of 7.6% per year, over the last three years. This reduction in EPS is slower than the 31% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 7.96.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
earnings, revenue and cash flow.” data-reactid=”49″>We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Mohawk Industries’ earnings, revenue and cash flow.
A Different Perspective
2 warning signs we think you should be aware of.” data-reactid=”51″>Investors in Mohawk Industries had a tough year, with a total loss of 31%, against a market gain of about 19%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 9.9% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 – Mohawk Industries has 2 warning signs we think you should be aware of.
list of growing companies with insider buying.” data-reactid=”52″>Mohawk Industries is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”54″>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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