If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of Helix Energy Solutions Group, Inc. (NYSE:HLX) have had an unfortunate run in the last three years. Sadly for them, the share price is down 60% in that time. Shareholders have had an even rougher run lately, with the share price down 28% in the last 90 days. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Since Helix Energy Solutions Group has shed US$72m from its value in the past 7 days, let’s see if the longer term decline has been driven by the business’ economics.
See our latest analysis for Helix Energy Solutions Group
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.
During the three years that the share price fell, Helix Energy Solutions Group’s earnings per share (EPS) dropped by 45% each year. This fall in the EPS is worse than the 26% compound annual share price fall. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term. With a P/E ratio of 47.41, it’s fair to say the market sees a brighter future for the business.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
A Different Perspective
While the broader market gained around 33% in the last year, Helix Energy Solutions Group shareholders lost 13%. 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, longer term shareholders are suffering worse, given the loss of 9% doled out over the last five years. We’d need to see some sustained improvements in the key metrics before we could muster much enthusiasm. It’s always interesting to track share price performance over the longer term. But to understand Helix Energy Solutions Group better, we need to consider many other factors. For example, we’ve discovered 4 warning signs for Helix Energy Solutions Group that you should be aware of before investing here.
Of course Helix Energy Solutions Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
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