While it may not be enough for some shareholders, we think it is good to see the Howmet Aerospace Inc. (NYSE:HWM) share price up 21% in a single quarter. But that doesnt help the fact that the three year return is less impressive. Truth be told the share price declined 42% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

See our latest analysis for Howmet Aerospace

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a companys share price and its earnings per share (EPS).

During five years of share price growth, Howmet Aerospace moved from a loss to profitability. We would usually expect to see the share price rise as a result. So given the share price is down its worth checking some other metrics too.

Revenue is actually up 4.7% over the three years, so the share price drop doesnt seem to hinge on revenue, either. This analysis is just perfunctory, but it might be worth researching Howmet Aerospace more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts

Wed be remiss not to mention the difference between Howmet Aerospaces total shareholder return (TSR) and its share price return. 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. Howmet Aerospaces TSR of was a loss of 22% for the 3 years. That wasnt as bad as its share price return, because it has paid dividends.

Howmet Aerospace shareholders are down 18% for the year, but the broader market is up 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 7.0% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. 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. 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. Like risks, for instance. Every company has them, and weve spotted 4 warning signs for Howmet Aerospace (of which 2 are potentially serious!) you should know about.

Howmet Aerospace is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.

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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. *Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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Reflecting on Howmet Aerospaces (NYSE:HWM) Share Price Returns Over The Last Three Years - Simply Wall St