Passive investing in index funds can generate returns that roughly match the overall market. But you can do a lot better than that by buying good quality businesses for attractive prices. For example, the Boston Scientific Corporation (NYSE:BSX) share price is 42% higher than it was five years ago, which is more than the market average. In stark contrast, the stock price has actually fallen 9.5% in the last year.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Boston Scientific
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over half a decade, Boston Scientific managed to grow its earnings per share at 0.05% a year. This EPS growth is lower than the 7% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 70.06.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
NYSE:BSX Earnings Per Share Growth October 24th 2022
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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
While it's never nice to take a loss, Boston Scientific shareholders can take comfort that their trailing twelve month loss of 9.5% wasn't as bad as the market loss of around 23%. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Boston Scientific (at least 1 which is concerning) , and understanding them should be part of your investment process.
Boston Scientific is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
被動投資指數基金可以產生與整體市場大致相當的回報。但通過以有吸引力的價格收購質量好的企業,你可以做得更好。例如,波士頓科學公司(紐約證券交易所股票代碼:BSX)股價比五年前高出42%,高於市場平均水平。與此形成鮮明對比的是,該公司股價在過去一年裏實際下跌了9.5%。
讓我們來看看較長期的基本基本面,看看它們是否與股東回報一致。
查看我們對波士頓科學公司的最新分析
雖然市場是一種強大的定價機制,但股價反映的是投資者情緒,而不僅僅是潛在的企業表現。考察市場情緒如何隨時間變化的一種方法是觀察一家公司的股價和每股收益(EPS)之間的相互作用。
在過去的五年裏,波士頓科學公司的每股收益以每年0.05%的速度增長。這一每股收益增幅低於股價年均7%的增幅。因此,可以公平地認為,市場對這項業務的看法比五年前更高。考慮到五年來盈利增長的記錄,這並不一定令人驚訝。這種有利的情緒反映在其(相當樂觀的)市盈率為70.06。
該公司的每股收益(在一段時間內)如下圖所示(點擊查看具體數字)。
紐約證券交易所:BSX每股收益增長2022年10月24日
我們喜歡的是,內部人士在過去12個月一直在買入股票。話雖如此,大多數人認為盈利和收入增長趨勢是更有意義的業務指南。在買賣股票之前,我們總是建議仔細檢查一下歷史增長趨勢,可在此處找到。
不同的視角
雖然虧損從來都不是好事,但波士頓科學公司的股東們可以感到欣慰的是,他們過去12個月的9.5%的虧損並沒有市場約23%的虧損那麼糟糕。較長期的投資者不會如此沮喪,因為他們在五年內每年會獲得7%的收益。可能該業務只是面臨一些短期問題,但股東應密切關注基本面。我發現,把股價作為衡量企業業績的長期指標是非常有趣的。但為了真正獲得洞察力,我們還需要考慮其他信息。例如,考慮一下無處不在的投資風險幽靈。我們已經確定了三個警告信號與波士頓科學公司合作(至少有1個是相關的),瞭解他們應該是你投資過程的一部分。
波士頓科學並不是內部人士買入的唯一一隻股票。對於那些想要找到贏得投資這免費最近有內幕收購的不斷增長的公司名單可能就是合適的選擇。
請注意,本文引用的市場回報反映了目前在美國交易所交易的股票的市場加權平均回報。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。