Camurus (STO:CAMX) shareholders have earned a 45% CAGR over the last five years

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held Camurus AB (publ) (STO:CAMX) shares for the last five years, while they gained 542%. If that doesn't get you thinking about long term investing, we don't know what will. On the other hand, we note it's down 9.4% in about a month. We note that the broader market is down 2.5% in the last month, and this may have impacted Camurus' share price. It really delights us to see such great share price performance for investors.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Camurus

While Camurus made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Camurus can boast revenue growth at a rate of 49% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 45%(per year) over the same period. Despite the strong run, top performers like Camurus have been known to go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

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

It is of course excellent to see how Camurus has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Camurus stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Camurus has rewarded shareholders with a total shareholder return of 69% in the last twelve months. That gain is better than the annual TSR over five years, which is 45%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Take risks, for example - Camurus has 2 warning signs we think you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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