WANdisco's (LON:WAND) Wonderful 554% Share Price Increase Shows How Capitalism Can Build Wealth

For many, the main point of investing in the stock market is to achieve spectacular returns. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held WANdisco plc (LON:WAND) shares for the last five years, while they gained 554%. If that doesn't get you thinking about long term investing, we don't know what will. And in the last month, the share price has gained 9.0%.

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

See our latest analysis for WANdisco

Because WANdisco made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years WANdisco saw its revenue grow at 8.2% per year. That's a pretty good long term growth rate. However, the share price gain of 46% during the period is considerably stronger. We usually like strong growth stocks but it does seem the market already appreciates this one quite well!

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for WANdisco in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that WANdisco shareholders have received a total shareholder return of 12% over one year. Having said that, the five-year TSR of 46% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for WANdisco you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies 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 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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