Mako Mining (CVE:MKO) delivers shareholders splendid 24% CAGR over 5 years, surging 11% in the last week alone

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term Mako Mining Corp. (CVE:MKO) shareholders would be well aware of this, since the stock is up 188% in five years. And in the last week the share price has popped 11%. This could be related to the recent financial results, released less than a week ago -- you can catch up on the most recent data by reading our company report.

Since the stock has added CA$28m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Mako Mining

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, Mako Mining became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Mako Mining's key metrics by checking this interactive graph of Mako Mining's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Mako Mining has rewarded shareholders with a total shareholder return of 152% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 24% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Case in point: We've spotted 2 warning signs for Mako Mining you should be aware of.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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