Hilton Grand Vacations'(NYSE:HGV) Share Price Is Down 43% Over The Past Three Years.

As an investor its worth striving to ensure your overall portfolio beats the market average. But the risk of stock picking is that you will likely buy under-performing companies. We regret to report that long term Hilton Grand Vacations Inc. (NYSE:HGV) shareholders have had that experience, with the share price dropping 43% in three years, versus a market return of about 46%.

And more recent buyers are having a tough time too, with a drop of 34% in the last year. The silver lining is that the stock is up 4.3% in about a week. Check out our latest analysis for Hilton Grand Vacations

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During the three years that the share price fell, Hilton Grand Vacations’ earnings per share (EPS) dropped by 18% each year.

This change in EPS is reasonably close to the 17% average annual decrease in the share price. So it seems like sentiment towards the stock hasn’t changed all that much over time. It seems like the share price is reflecting the declining earnings per share.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growthNYSE:HGV Earnings Per Share Growth October 13th 2020

This free interactive report on Hilton Grand Vacations’ earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Hilton Grand Vacations shareholders are down 34% for the year, but the broader market is up 25%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 13% per year isn’t as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems.

We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It’s always interesting to track share price performance over the longer term. But to understand Hilton Grand Vacations better, we need to consider many other factors.

Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Hilton Grand Vacations (of which 1 makes us a bit uncomfortable!) you should know about. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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