If You Had Bought Tower Semiconductor (NASDAQ:TSEM) Shares Five Years Ago You'd Have Earned42% Returns

Tower Semiconductor Ltd. (NASDAQ:TSEM) shareholders might be concerned after seeing the share price drop 12% in the last month. On the bright side the share price is up over the last half decade. Unfortunately its return of 42% is below the market return of 89%. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 37% decline over the last three years: that's a long time to wait for profits.

See our latest analysis for Tower Semiconductor

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last half decade, Tower Semiconductor became profitable. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Tower Semiconductor's earnings, revenue and cash flow.

A Different Perspective

Tower Semiconductor shareholders are down 7.4% for the year, but the market itself is up 16%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 7.3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Tower Semiconductor better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Tower Semiconductor you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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