If You Had Bought Ergomed (LON:ERGO) Stock Five Years Ago, You Could Pocket A 643% Gain Today

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. For example, the Ergomed plc (LON:ERGO) share price is up a whopping 643% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. Also pleasing for shareholders was the 46% gain in the last three months.

We love happy stories like this one. The company should be really proud of that performance!

See our latest analysis for Ergomed

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Ergomed moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that Ergomed 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 Ergomed stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Ergomed shareholders have received a total shareholder return of 183% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 49% 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. It's always interesting to track share price performance over the longer term. But to understand Ergomed better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Ergomed you should be aware of.

But note: Ergomed may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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