Those who invested in Tuas (ASX:TUA) five years ago are up 826%

Long term investing can be life changing when you buy and hold the truly great businesses. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the Tuas Limited (ASX:TUA) share price has soared 826% over five years. And this is just one example of the epic gains achieved by some long term investors. It's down 2.6% in the last seven days. It really delights us to see such great share price performance for investors.

So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.

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Given that Tuas only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Tuas can boast revenue growth at a rate of 32% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 56%(per year) over the same period. It's never too late to start following a top notch stock like Tuas, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

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

We know that Tuas has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Tuas stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Tuas shareholders have received a total shareholder return of 36% over one year. Having said that, the five-year TSR of 56% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Tuas , and understanding them should be part of your investment process.

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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.