First Interstate BancSystem Inc (NASDAQ:FIBK) shareholders suffered a 7.7% loss after investing in the stock a year ago

First Interstate BancSystem, Inc. (NASDAQ:FIBK) shareholders should be happy to see the stock price rise 11% in the last quarter. It’s not great that the stock is down from last year. But at least it made up for the 18% loss in its market.

Given that shareholders are down longer term, let’s take a look at the underlying fundamentals over this period and see if they have been consistent with returns.

Check out our latest analysis for First Interstate BancSystem

Although the efficient markets hypothesis continues to be taught by some, it has been proven that markets are dynamic systems that are too reactive and that investors are not always rational. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

Unfortunately, First Interstate BancSystem reported a 47% decline in EPS for the past year. The 12% drop in share price is not as bad as the reduction in earnings per share. So, despite the weak earnings per share, some investors are probably relieved that the situation has not been more difficult.

The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).

earnings per share growth

It’s probably worth noting that we’ve seen significant insider buying over the past quarter, which we view as a positive. On the other hand, we believe revenue and earnings trends are much more meaningful measures of the business. It might be interesting to take a look at our free First Interstate BancSystem earnings, revenue and cash flow report.

What about dividends?

It is important to consider the total shareholder return, as well as the stock price return, for a given stock. The TSR incorporates the value of any spin-offs or discounted capital increases, as well as any dividends, based on the assumption that dividends are reinvested. It’s fair to say that the TSR gives a more complete picture of stocks that pay a dividend. We note that for First Interstate BancSystem, the TSR over the past year was -7.7%, which is better than the stock price return mentioned above. And there’s no price guessing that dividend payouts largely explain the divergence!

A different perspective

While it’s never nice to take a loss, First Interstate BancSystem shareholders can take comfort in knowing that, including dividends, their 7.7% year-over-year loss was not nearly as bad as the loss of the market by approximately 18%. Of course, the long-term returns are much more important, and the good news is that over five years, the stock has returned 5% for each year. At best, the past year is only a temporary breach on the path to a brighter future. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we have identified 4 warning signs for First Interstate BancSystem (1 is a little unpleasant) which you should be aware of.

First Interstate BancSystem isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

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

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

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