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SeaWorld Entertainment (NYSE:SEAS) Shareholders Achieve 32% CAGR Over Last Five Years

For many people, the main point of investing in the stock market is to achieve spectacular returns. And we’ve made some really amazing progress over the years. Seaworld Entertainment Co., Ltd. (NYSE:SEAS) stock has risen a whopping 303% over the past five years, making it an excellent return for long-term holders. And this is just one example of the spectacular returns some long-term investors have achieved. And last month, the stock was up 34%. However, this may be related to favorable market conditions. Shares in that market have risen 14% in the last month.

Let’s look at the underlying fundamentals over the long term and see if they align with shareholder returns.

Markets are powerful pricing mechanisms, but stock prices reflect investor sentiment, not just underlying performance. One flawed but plausible way to assess how a company’s sentiment has changed is to compare its earnings per share (EPS) to its stock price.

SeaWorld Entertainment went from loss to profit during the five-year stock rally. This kind of transition, as we’ve seen here, can be an inflection point that justifies a significant rise in stock prices. The company was unprofitable five years before him, three years ago it was unprofitable, so it’s worth looking at the last three years of earnings as well. In fact, SeaWorld Entertainment’s stock has risen 71% in his three years. During the same period, EPS grew by 52% each year. This EPS growth outpaces his three-year average annual share price increase of 20%. So we might conclude that the market has been a little more cautious on equities lately.

The image below shows how the EPS changed over time (click the image to see the exact values).

Earnings per share growth
NYSE: SEAS Earnings Per Share Growth Aug 14, 2022

It’s good to see insiders buying shares in the last 12 months. Still, future profits are far more important than whether current shareholders are profitable.Might be worth taking a look at us freedom Reports on SeaWorld Entertainment’s earnings, earnings and cash flow.

another point of view

It’s great that SeaWorld Entertainment’s shareholders received a total shareholder return of 2.4% last year. But that falls short of the 32% annual TSR it has been doing to its shareholders every year for five years. Potential buyers may understandably feel they have missed an opportunity, but there is always the possibility that the business is still firing on all cylinders. I think it will be very interesting to see. But for true insight, other information must also be considered. To do so, you should be aware of the following: four warning signs Found at SeaWorld Entertainment.

If you like buying stocks with management, you might like this one freedom company list. (Hint: Insiders are buying).

Please note that the market returns quoted in this article reflect market-weighted average returns for stocks currently traded on US exchanges.

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This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or qualitative materials. Is not …

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.