Investors in USA Truck (NASDAQ:USAK) have unfortunately lost 33% over the last three years

In order to justify the effort of selecting individual stocks, it’s worth striving to beat the returns from a market index fund. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that’s been the case for longer term USA Truck, Inc. (NASDAQ:USAK) shareholders, since the share price is down 33% in the last three years, falling well short of the market return of around 66%.

The falls have accelerated recently, with the share price down 12% in the last three months. With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. View our latest analysis for USA Truck

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During five years of share price growth, USA Truck moved from a loss to profitability.

That would generally be considered a positive, so we are surprised to see the share price is down. So it’s worth looking at other metrics to try to understand the share price move. We note that, in three years, revenue has actually grown at a 4.1% annual rate, so that doesn’t seem to be a reason to sell shares.

It’s probably worth investigating USA Truck further; while we may be missing something on this analysis, there might also be an opportunity. The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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We know that USA Truck has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on USA Truck

A Different Perspective

USA Truck provided a TSR of 26% over the last twelve months.

But that return falls short of the market. On the bright side, that’s still a gain, and it’s actually better than the average return of 5% over half a decade This suggests the company might be improving over time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important.

For example, we’ve discovered 1 warning sign for USA Truck that you should be aware of before investing here.
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We will like USA Truck better if we see some big insider buys.

While we wait, check out this free list of growing companies with considerable, recent, 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. We provide commentary based on historical data and analyst forecasts only using an 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 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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