Maui Land & Pineapple Company, Inc. (NYSE:MLP) shareholders might be concerned after seeing the share price drop 15% in the last quarter. But the silver lining is the stock is up over five years. Unfortunately its return of 62% is below the market return of 111%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 27% drop, in the last year.
Since the stock has added US$44m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Maui Land & Pineapple Company wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
For the last half decade, Maui Land & Pineapple Company can boast revenue growth at a rate of 5.7% per year. That's not a very high growth rate considering the bottom line. It's probably fair to say that the modest growth is reflected in the modest share price gain of 10% per year. If profitability is likely in the near term, then this might be one to add to your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Maui Land & Pineapple Company shareholders are down 27% for the year, but the market itself is up 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. Longer term investors wouldn't be so upset, since they would have made 10%, 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Maui Land & Pineapple Company .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.
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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.