The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the Oracle Corporation (NYSE:ORCL) share price has soared 122% in the last half decade. Most would be very happy with that. Meanwhile the share price is 3.3% higher than it was a week ago.
Since it's been a strong week for Oracle shareholders, let's have a look at trend of the longer term fundamentals.
View our latest analysis for Oracle
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.
Over half a decade, Oracle managed to grow its earnings per share at 31% a year. The EPS growth is more impressive than the yearly share price gain of 17% over the same period. So one could conclude that the broader market has become more cautious towards the stock.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Oracle the TSR over the last 5 years was 141%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's good to see that Oracle has rewarded shareholders with a total shareholder return of 25% in the last twelve months. That's including the dividend. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Oracle better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Oracle .
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
"though" - Google News
January 23, 2024 at 06:01PM
https://ift.tt/yBAal5c
Oracle (NYSE:ORCL) jumps 3.3% this week, though earnings growth is still tracking behind five-year shareholder returns - Yahoo Finance
"though" - Google News
https://ift.tt/1PZfUbY
https://ift.tt/6ZFpSoO
Bagikan Berita Ini
0 Response to "Oracle (NYSE:ORCL) jumps 3.3% this week, though earnings growth is still tracking behind five-year shareholder returns - Yahoo Finance"
Post a Comment