Most investors take the time to check the data on insider transactions.
If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Longer term investors wouldn't be so upset, since they would have made 20%, each year, over five years. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. However, it could simply be that the share price has been impacted by broader market jitters. Unfortunately, that's worse than the broader market decline of 21%. We regret to report that NVIDIA shareholders are down 42% for the year (even including dividends). This free interactive report on NVIDIA's balance sheet strength is a great place to start, if you want to investigate the stock further. It is of course excellent to see how NVIDIA has grown profits over the years, but the future is more important for shareholders. The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers). Au contraire, the share price change has arguably mimicked the EPS growth. That suggests that the market sentiment around the company hasn't changed much over that time. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 37% average annual increase in the share price. 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.ĭuring three years of share price growth, NVIDIA achieved compound earnings per share growth of 40% per year. To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. Only time will tell if there is still too much optimism currently reflected in the share price. After a run like that some may not be surprised to see prices moderate. In fact, the share price is up a full 160% compared to three years ago. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. While NVIDIA Corporation ( NASDAQ:NVDA) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 24% in the last quarter.
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