New Zealand markets closed
  • NZX 50

    12,197.15
    +44.95 (+0.37%)
     
  • NZD/USD

    0.6317
    -0.0012 (-0.20%)
     
  • NZD/EUR

    0.5853
    -0.0003 (-0.05%)
     
  • ALL ORDS

    7,752.70
    -19.10 (-0.25%)
     
  • ASX 200

    7,543.90
    -14.20 (-0.19%)
     
  • OIL

    73.51
    +0.12 (+0.16%)
     
  • GOLD

    1,879.50
    +2.90 (+0.15%)
     
  • NASDAQ

    12,573.36
    -229.74 (-1.79%)
     
  • FTSE

    7,901.80
    +81.64 (+1.04%)
     
  • Dow Jones

    33,926.01
    -127.89 (-0.38%)
     
  • DAX

    15,476.43
    -32.77 (-0.21%)
     
  • Hang Seng

    21,660.47
    -297.93 (-1.36%)
     
  • NIKKEI 225

    27,685.65
    +176.19 (+0.64%)
     
  • NZD/JPY

    83.5670
    +0.5570 (+0.67%)
     

The 7.7% return this week takes Bio-Rad Laboratories' (NYSE:BIO) shareholders five-year gains to 49%

While Bio-Rad Laboratories, Inc. (NYSE:BIO) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 27% in the last quarter. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 49%, less than the market return of 56%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 48% drop, in the last year.

The past week has proven to be lucrative for Bio-Rad Laboratories investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for Bio-Rad Laboratories

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Over half a decade, Bio-Rad Laboratories managed to grow its earnings per share at 4.0% a year. We do note that extraordinary items have impacted its earnings history. This EPS growth is slower than the share price growth of 8% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
earnings-per-share-growth

It might be well worthwhile taking a look at our free report on Bio-Rad Laboratories' earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 24% in the twelve months, Bio-Rad Laboratories shareholders did even worse, losing 48%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before spending more time on Bio-Rad Laboratories it might be wise to click here to see if insiders have been buying or selling shares.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here