The 3.2% return this week takes New Fortress Energy's (NASDAQ:NFE) shareholders five-year gains to 173%

New Fortress Energy -3.04% Pre

New Fortress Energy

NFE

24.20

24.33

-3.04%

+0.54% Pre

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. One great example is New Fortress Energy Inc. (NASDAQ:NFE) which saw its share price drive 143% higher over five years. It's also good to see the share price up 12% over the last quarter. But this could be related to the strong market, which is up 18% in the last three months.

Since it's been a strong week for New Fortress Energy shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for New Fortress Energy

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the last half decade, New Fortress Energy became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
NasdaqGS:NFE Earnings Per Share Growth January 30th 2024

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on New Fortress Energy's earnings, revenue and cash flow.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, New Fortress Energy's TSR for the last 5 years was 173%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the broader market gained around 22% in the last year, New Fortress Energy shareholders lost 7.4% (even including dividends). 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 22%, 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. It's always interesting to track share price performance over the longer term. But to understand New Fortress Energy better, we need to consider many other factors. Even so, be aware that New Fortress Energy is showing 3 warning signs in our investment analysis , you should know about...

New Fortress Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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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