Gibson Energy (TSE:GEI) shareholders are no doubt pleased to see that the share price has bounced 43% in the last month alone, although it is still down 34% over the last quarter. But shareholders may not all be feeling jubilant, since the share price is still down 22% in the last year.
Assuming no other changes, a sharply higher share price makes a stock less attractive to potential buyers. While the market sentiment towards a stock is very changeable, in the long run, the share price will tend to move in the same direction as earnings per share. So some would prefer to hold off buying when there is a lot of optimism towards a stock. One way to gauge market expectations of a stock is