Yahoo Finance Boston Beer Company (NYSE:SAM) stock falls 3.8% in past week as three-year earnings and shareholder returns continue downward trend
As every investor would know, not every swing hits the sweet spot. But really bad investments should be rare. So consider, for a moment, the misfortune of The Boston Beer Company, Inc. (NYSE:SAM) investors who have held the stock for three years as it declined a whopping 73%. That would certainly shake our confidence in the decision to own the stock. The falls have accelerated recently, with the share price down 18% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
If the past week is anything to go by, investor sentiment for Boston Beer Company isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for Boston Beer Company
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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Boston Beer Company saw its EPS decline at a compound rate of 26% per year, over the last three years. This reduction in EPS is slower than the 35% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Boston Beer Company has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Boston Beer Company will grow revenue in the future.
A Different Perspective
Boston Beer Company shareholders are down 7.6% for the year, but the market itself is up 31%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 0.2%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. If you would like to research Boston Beer Company in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
But note: Boston Beer Company may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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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.
