Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. To wit, the Lattice Semiconductor Corporation (NASDAQ:LSCC) share price has flown 181% in the last three years. How nice for those who held the stock! On top of that, the share price is up 29% in about a quarter.
Because Lattice Semiconductor is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 3 years Lattice Semiconductor saw its revenue shrink by 2.4% per year. So we wouldn’t have expected the share price to gain 41% per year, but it has. It’s a good reminder that expectations about the future, not the past history, always impact share prices.
It’s good to see that there was some significant insider buying in the last three months. That’s a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Lattice Semiconductor stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
We’re pleased to report that Lattice Semiconductor shareholders have received a total shareholder return of 155% over one year. That gain is better than the annual TSR over five years, which is 16%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.