If You Had Bought Sinclair Broadcast Group's (NASDAQ:SBGI) Shares A Year Ago You Would Be Down 53%

While it may not be enough for some shareholders, we think it is good to see the Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) share price up 18% in a single quarter. But that's not enough to compensate for the decline over the last twelve months. Like a receding glacier in a warming world, the share price has melted 53% in that period. The share price recovery is not so impressive when you consider the fall. It may be that the fall was an overreaction.

Check out our latest analysis for Sinclair Broadcast Group

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 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).

Even though the Sinclair Broadcast Group share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.

Sinclair Broadcast Group's dividend seems healthy to us, so we doubt that the yield is a concern for the market. The revenue trend doesn't seem to explain why the share price is down. Unless, of course, the market was expecting a revenue uptick.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Sinclair Broadcast Group

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Sinclair Broadcast Group's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Sinclair Broadcast Group's TSR of was a loss of 51% for the year. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

While the broader market gained around 13% in the last year, Sinclair Broadcast Group shareholders lost 51% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 2.8% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Sinclair Broadcast Group better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Sinclair Broadcast Group you should be aware of, and 2 of them are significant.

Sinclair Broadcast Group 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.

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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