Air Transport Services Group (NASDAQ: ATSG) 12% CAGR Outpaced Company Profit Growth in Same Five-Year Period

When you buy and hold a stock for the long term, you absolutely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. Unfortunately for the shareholders, while the Airline Services Group, Inc. The stock price (NASDAQ: ATSG) has risen 73% over the past five years, less than the market performance. The past year has been disappointing, with the share price falling 7.3% during that time.

After a solid gain last week, it’s worth seeing if long-term returns have been boosted by improving fundamentals.

To paraphrase Benjamin Graham: In the short term the market is a voting machine, but in the long term it is a weighing machine. A flawed but reasonable way to gauge how sentiment is changing around a company is to compare earnings per share (EPS) with the stock price.

During the five years of share price growth, Air Transport Services Group has gone from loss to profitability. This is generally seen as a real positive, so we would expect the share price to rise.

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

NasdaqGS: Growth in earnings per share of ATSG on December 22, 2021

It’s probably worth noting that we’ve seen some significant insider buying in the past quarter, which we see as positive. That said, we believe earnings and revenue growth trends are even more important factors to consider. This free The interactive Air Transport Services Group Profit, Revenue and Cash Flow report is a great place to start if you want to delve deeper into the stock market.

A different perspective

While the broader market gained around 19% last year, Air Transport Services Group shareholders lost 7.3%. Even good stock prices drop sometimes, but we want to see improvements in the fundamentals of a business, before we get too interested. On the plus side, long-term shareholders have made money, gaining 12% per year over half a decade. The recent sell-off may be an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Air Transport Services Group, there are many other factors that we need to consider. Like risks, for example. Every business has them, and we’ve spotted 4 warning signs for Air Transport Services Group (1 of which makes us a little uncomfortable!) to know.

Air Transport Services Group isn’t the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

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