If You Had Bought PQ Group Holdings' (NYSE:PQG) Shares A Year Ago You Would Be Down 24%

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by PQ Group Holdings Inc. (NYSE:PQG) shareholders over the last year, as the share price declined 24%. That's well below the market return of 19%. PQ Group Holdings may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 13% in the last three months.

See our latest analysis for PQ Group Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

Unfortunately PQ Group Holdings reported an EPS drop of 19% for the last year. The share price decline of 24% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on PQ Group Holdings' earnings, revenue and cash flow.

A Different Perspective

Given that the market gained 19% in the last year, PQ Group Holdings shareholders might be miffed that they lost 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 13% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Even so, be aware that PQ Group Holdings is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

PQ Group Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.