Yahoo Finance Intel's (NASDAQ:INTC three-year decrease in earnings delivers investors with a 62% loss
The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of Intel Corporation (NASDAQ:INTC) have had an unfortunate run in the last three years. Sadly for them, the share price is down 65% in that time. And more recent buyers are having a tough time too, with a drop of 51% in the last year. Shareholders have had an even rougher run lately, with the share price down 38% in the last 90 days.
After losing 5.6% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for Intel
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
Intel became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.
Arguably the revenue decline of 16% per year has people thinking Intel is shrinking. After all, if revenue keeps shrinking, it may be difficult to find earnings growth in the future.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Intel stock, you should check out this free report showing analyst profit forecasts.
What About The Total Shareholder Return (TSR)?
We've already covered Intel's share price action, but we should also mention its total shareholder return (TSR). 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. Intel's TSR of was a loss of 62% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
Investors in Intel had a tough year, with a total loss of 50%, against a market gain of about 22%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Intel better, we need to consider many other factors. Even so, be aware that Intel is showing 3 warning signs in our investment analysis , you should know about...
Intel is not the only stock that insiders are buying. For those who like to find lesser know companies 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 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.
