If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can do a lot better than that by buying good quality businesses for attractive prices. For example, the Adobe Inc. (NASDAQ:ADBE) share price is up 86% in the last five years, slightly above the market return. Also positive is the 17% share price rise over the last year.
The past week has proven to be lucrative for Adobe investors, so let's see if fundamentals drove the company's five-year performance.
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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over half a decade, Adobe managed to grow its earnings per share at 16% a year. The EPS growth is more impressive than the yearly share price gain of 13% over the same period. So it seems the market isn't so enthusiastic about the stock these days.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
NasdaqGS:ADBE Earnings Per Share Growth July 4th 2024
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
A Different Perspective
Adobe provided a TSR of 17% over the last twelve months. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 13% per year over five year. It is possible that returns will improve along with the business fundamentals. 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. For example, we've discovered 1 warning sign for Adobe that you should be aware of before investing here.
But note: Adobe may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
如果你想在股票市场上增加财富,你可以通过购买指数基金来实现。但是,通过以诱人的价格收购优质的企业,你可以做得比这好得多。例如,Adobe公司(纳斯达克股票代码:ADBE)的股价在过去五年中上涨了86%,略高于市场回报率。去年股价上涨了17%,这也是一个积极因素。
事实证明,过去一周对Adobe投资者来说是有利可图的,所以让我们看看基本面是否推动了公司的五年业绩。
用本杰明·格雷厄姆的话来说:从短期来看,市场是一台投票机器,但从长远来看,它是一台称重机。考虑市场对公司的看法发生了怎样的变化的一种不完美但简单的方法是将每股收益(EPS)的变化与股价走势进行比较。
在过去的五年中,Adobe设法将其每股收益增长到每年16%。每股收益的增长比同期13%的年度股价增长更令人印象深刻。因此,如今市场似乎对该股并不那么热情。
该公司的每股收益(随着时间的推移)如下图所示(点击查看确切数字)。
纳斯达克GS:2024年7月4日ADBE每股收益增长
在买入或卖出股票之前,我们始终建议仔细研究历史增长趋势,可在此处查阅。
不同的视角
在过去的十二个月中,Adobe提供的股东回报率为17%。但这低于市场平均水平。一线希望是,收益实际上好于五年内每年13%的平均年回报率。回报率可能会随着业务基本面的改善而改善。尽管市场状况可能对股价产生的不同影响值得考虑,但还有其他因素更为重要。例如,我们发现了Adobe的1个警告信号,在投资之前,您应该注意这一点。
但请注意:Adobe可能不是最值得购买的股票。因此,来看看这份过去盈利增长(以及进一步增长预测)的有趣公司的免费清单。
请注意,本文引用的市场回报反映了目前在美国交易所交易的股票的市场加权平均回报。