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Long term investing can be life changing when you buy and hold the truly great businesses. And we’ve seen some truly amazing gains over the years. Just think about the savvy investors who held Perseus SA (ATH:PERS) shares for the last five years, while they gained 434%. If that doesn’t get you thinking about long term investing, we don’t know what will. Also pleasing for shareholders was the 29% gain in the last three months. But this could be related to the strong market, which is up 15% in the last three months.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During five years of share price growth, Perseus achieved compound earnings per share (EPS) growth of 28% per year. This EPS growth is lower than the 40% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That’s not necessarily surprising considering the five-year track record of earnings growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Perseus’s key metrics by checking this interactive graph of Perseus’s earnings, revenue and cash flow.
A Different Perspective
We’re pleased to report that Perseus shareholders have received a total shareholder return of 44% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 40% per year), it would seem that the stock’s performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Is Perseus cheap compared to other companies? These 3 valuation measures might help you decide.
But note: Perseus 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 GR exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.