If you love investing in stocks you're bound to buy some losers. Long term Neogen Corporation (NASDAQ:NEOG) shareholders know that all too well, since the share price is down considerably over three years. So they might be feeling emotional about the 60% share price collapse, in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 21% lower in that time. But it's up 5.1% in the last week. The buoyant market could have helped drive the share price pop, since stocks are up 4.2% in the same period.

While the last three years has been tough for Neogen shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

Check out our latest analysis for Neogen

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Neogen has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. Other metrics may better explain the share price move.

Revenue is actually up 28% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Neogen further; while we may be missing something on this analysis, there might also be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Neogen stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Investors in Neogen had a tough year, with a total loss of 21%, against a market gain of about 26%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.