We think all investors should try to buy and hold high quality multi-year winners. While the best companies are hard to find, but they can generate massive returns over long periods. Don't believe it? Then look at the Tchaikapharma High Quality Medicines AD (BUL:THQM) share price. It's 313% higher than it was five years ago. If that doesn't get you thinking about long term investing, we don't know what will.
We don't think that Tchaikapharma High Quality Medicines AD's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
In the last 5 years Tchaikapharma High Quality Medicines AD saw its revenue grow at 5.0% per year. That's not a very high growth rate considering the bottom line. Therefore, we're a little surprised to see the share price gain has been so strong, at 33% per year, compound, over the period. We'll tip our hats to that, any day, but the top-line growth isn't particularly impressive when you compare it to other pre-profit companies. It's not immediately obvious to us why the market has been so enthusiastic about the stock, but a more detailed look at revenue and profit trends might reveal why shareholders are optimistic.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Tchaikapharma High Quality Medicines AD stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Tchaikapharma High Quality Medicines AD shareholders have received a total shareholder return of 24% over one year. Having said that, the five-year TSR of 33% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand Tchaikapharma High Quality Medicines AD better, we need to consider many other factors. Even so, be aware that Tchaikapharma High Quality Medicines AD is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...
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 BG exchanges.
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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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